Electricity output is recovering, but the country’s dependence on Pljevlja, hydrology and imported goods keeps the trade position fragile.
Montenegro’s export outlook in the second half of 2026 may depend less on factories than on electricity.
The country’s goods trade position remains structurally weak. In the first quarter of 2026, Montenegro’s total external trade in goods was €1.07bn, down 2.2 per cent year on year. Exports fell 15.2 per cent to €127.3mn, while imports were almost unchanged at €944.5mn. Export-import coverage slipped to just 13.5 per cent, from 15.9 per cent a year earlier.
Electricity is central to the export mix. In the same period, mineral fuels and related products were Montenegro’s largest export category, worth €48.4mn, of which electric current accounted for €44.4mn. That means the country’s goods-export performance is highly sensitive to power output and prices.
The production data point to a rebound. Industrial production rose 7.5 per cent year on year in the first quarter, driven by a 27.3 per cent increase in electricity, gas, steam and air-conditioning supply. Manufacturing fell 4.0 per cent, while mining and quarrying fell 17.0 per cent.
This creates a split industrial forecast. Montenegro’s electricity sector should support growth more than manufacturing does in H2, particularly after the drag caused by the temporary closure of the Pljevlja thermal power plant in 2025. The EBRD noted that growth moderated in 2025 partly because of weaker electricity exports after Pljevlja was closed for ecological reconstruction, and that electricity production improved after the plant resumed operations.
But the recovery is not risk-free. Montenegro’s power system is concentrated. Pljevlja remains strategically important, while hydropower output depends on weather and water conditions. OECD analysis notes that hydropower accounted for more than half of Montenegro’s electricity generation in 2023, while coal-fired generation came from the Pljevlja plant.
The investment story is more positive. In January, Montenegro’s state-owned utility EPCG and the UAE’s Masdar agreed to explore a joint venture for large-scale renewable projects, including solar, wind, hydropower, battery storage and hybrid systems. The projects are intended both for domestic demand and potential green-power exports, including through the undersea link to Italy.
The H2 forecast is therefore one of recovery, not transformation. Electricity exports should improve compared with the disrupted 2025 base, but Montenegro’s overall goods trade will remain deeply negative because imports are large and manufacturing exports are thin.
The best-positioned companies are EPCG-linked contractors, renewable developers, grid and battery-storage suppliers, engineering firms and businesses that can reduce their own energy intensity. The weakest are import-heavy firms with little pricing power and manufacturers exposed to high power or logistics costs.
Electricity output should remain a positive contributor in H2 2026, but Montenegro’s goods deficit will stay large. Renewables are the strategic upside, but not yet enough to change the 2026 trade picture.
Montenegro’s energy sector is no longer just a utility story. It is one of the few levers that can materially change the country’s export arithmetic.
