Montenegro entered the 2026 tourism season with a less comfortable external position than headline visitor numbers initially suggested. The country continued to generate a sizeable surplus from travel, transport and other internationally traded services, but the first-quarter balance-of-payments data show that this buffer is narrowing while the merchandise deficit remains deeply embedded in the economy.
The current-account deficit reached €594.9mn in the first quarter of 2026, widening by 15.1 per cent from €516.6mn a year earlier, according to the Central Bank of Montenegro. The combined deficit in goods and services increased by 7.5 per cent to €690.2mn.
Weak goods exports were the most visible pressure point. Merchandise exports declined 11.3 per cent to €143.2mn, while imports remained almost unchanged at €917.8mn. The resulting goods deficit expanded to €774.6mn, equivalent to more than five times the value of exports.
For a small, import-dependent and tourism-oriented economy, that imbalance is not unusual. Montenegro imports most of its consumer goods, equipment, vehicles, fuel and construction materials, while its export base is concentrated in electricity, metals, mineral products and a limited group of manufactured goods. The more important question is whether the services surplus is expanding quickly enough to finance the merchandise gap.
During the first quarter, it was not. The services surplus declined by 26.7 per cent to €84.4mn, compared with €115.2mn in the same period of 2025. Services revenue fell 14.7 per cent to €311.8mn, while expenditure declined by a smaller 9.2 per cent to €227.4mn.
The deterioration was spread across several categories rather than being confined to tourism. Transport produced a surplus of only €8.1mn, down 62.7 per cent year on year. Transport revenue declined 23.2 per cent to €120.2mn, while expenditure fell 16.8 per cent to €112.1mn.
These figures capture Montenegro’s reliance on foreign transport providers and the volatility of income connected with ports, aviation, road freight and maritime services. The Port of Bar, Montenegro Airlines’ successor structure, foreign carriers serving Tivat and Podgorica, and regional logistics flows all influence the balance, but the country has yet to convert its Adriatic location into a consistently large transport-services surplus.
Travel remained the strongest component. Receipts from foreign visitors reached €86.4mn, down 2.3 per cent, while residents’ travel spending abroad increased 8.3 per cent to €16.1mn. The travel surplus consequently declined 4.5 per cent to €70.3mn.
The first quarter is seasonally weak and cannot be treated as a forecast for the summer season. Montenegro earns most of its tourism income between June and September, particularly in Budva, Herceg Novi, Kotor, Tivat, Ulcinj and Bar. Yet the early data indicate that tourism is no longer delivering effortless double-digit growth.
During January-May, tourist arrivals increased by only 0.94 per cent, while overnight stays rose 1.10 per cent. Foreign arrivals were up 0.54 per cent and foreign overnight stays 0.90 per cent. Montenegro therefore entered the peak season with visitor volumes broadly flat and a greater dependence on higher accommodation prices and spending per guest to produce nominal revenue growth.
That creates a different type of tourism risk. Rising hotel and restaurant prices may lift receipts, but they also affect competitiveness against Croatia, Albania, Greece and Turkey. Montenegro’s limited air connectivity outside the summer season, congestion along the coast, shortages of skilled hospitality workers and uneven municipal infrastructure constrain the sector’s capacity to move from seasonal volume tourism towards higher-value year-round demand.
Large developments such as Porto Montenegro, Luštica Bay, Portonovi and the expanding premium hotel market have raised average asset values and broadened the country’s international profile. Their economic effect, however, extends beyond tourism receipts. Imported construction materials, foreign contractors, profit repatriation and real-estate transactions can generate substantial offsetting outflows.
Construction services illustrate this tension. The sector’s external surplus fell from €4.3mn to only €343,000 in the first quarter. Construction-services revenue declined 18.9 per cent to €6.8mn, while expenditure increased 57.2 per cent to €6.5mn.
Other business services also weakened. Revenue from consulting, engineering, professional and related activities fell 24.5 per cent to €37.3mn. Expenditure declined 16.7 per cent to €31.7mn, leaving a surplus of €5.6mn, roughly half the level recorded a year earlier.
This is one of the clearest differences between Montenegro and Serbia. Serbia has developed a large ICT and professional-services export base that provides a structural counterweight to merchandise trade. Montenegro’s services surplus remains dominated by travel and transport, making external earnings more seasonal and more exposed to household travel preferences, aviation capacity, geopolitical disruptions and coastal infrastructure.
The country has opportunities to broaden the base. Port logistics, maritime services, yacht maintenance, digital services, professional support for regional companies and energy trading could all generate less seasonal foreign earnings. SEPA participation and the launch of instant payments in July 2026 improve the infrastructure for cross-border business, but payment modernisation alone will not create a competitive export sector.
The income accounts added another layer of pressure. Montenegro moved from a primary-income surplus of €30.4mn in the first quarter of 2025 to a deficit of €4.5mn in the first quarter of 2026. Portfolio-investment income expenditure rose sharply to €65mn, reflecting the growing cost of servicing securities held by foreign investors.
Secondary income remained supportive, producing a surplus of €99.8mn, up from €94.9mn. Remittances, employee compensation and other transfers continue to cushion the current account, but they cannot fully offset a merchandise deficit approaching €775mn in a single quarter.
Foreign direct investment provided only partial financing. Gross FDI inflows reached €276.5mn in January-April, down 7.1 per cent, while net inflows fell 26.8 per cent to €119.3mn. Total outflows increased 16.7 per cent to €157.2mn, partly because of repayments of intercompany loans.
The composition remains heavily property-oriented. Real-estate investment accounted for €147.4mn, or more than half of gross inflows. Investment in Montenegrin companies and banks increased 79.4 per cent to €42.4mn, but remained comparatively small. Intercompany debt generated another €82.5mn, down 22.5 per cent.
Property investment brings foreign currency into the country, supports construction and creates demand for professional services. It does not necessarily generate the recurring export cash flow associated with a productive corporate investment. Once construction is completed, the external contribution depends on occupancy, tourism spending and the operating structure of the asset.
Montenegro’s services economy therefore remains profitable but narrow. The first-quarter deterioration does not imply a failed tourism season, but it reveals how much pressure falls on a few summer months. With the services surplus down 26.7 per cent, goods exports falling and net FDI weakening, the 2026 external position depends increasingly on the coast producing higher revenue without losing price competitiveness.
