Retail trade remains one of the clearest signs that Montenegro’s domestic economy is still expanding. Monstat’s January–April retail turnover index stood at 107.4 compared with the same period of 2025, while April alone was 107.6 compared with March. For a small, open, service-driven economy, this is a significant signal. Consumers are still spending.
The 2026 forecast should therefore treat retail as a stabilising force. Even if exports remain weak and industrial output becomes volatile, consumption can keep headline GDP growth close to 2.8–3.0%. This is consistent with the broader macro forecast from the IMF, which projects Montenegro’s real GDP growth at 2.8% in 2026.
But the retail story is becoming more price-sensitive. A turnover index above 107 does not automatically mean households are buying 7% more in real terms. Part of the increase reflects price growth. With consumer inflation at 3.1%in January–April and 3.6% year-on-year in May, the real retail gain is narrower than the nominal turnover figure suggests.
The key forecast range for 2026 is therefore 5–7% nominal retail growth, with real growth likely closer to 2–3.5%depending on the inflation path. A stronger tourism season would push retail higher in coastal municipalities, especially through food, fuel, restaurants, clothing, consumer services and short-term accommodation-related spending. A weaker season would expose how much of retail growth depends on domestic wage and employment trends.
The risk is not a collapse in consumption. The risk is compression. Households can continue spending while shifting toward essentials, discount formats and shorter purchasing cycles. That would keep turnover positive but reduce margins for retailers, restaurants and discretionary service providers. Businesses would see activity, but not necessarily profitability.
Imports are another part of the forecast. Montenegro’s consumption model relies heavily on imported goods, and Monstat shows imports at 101.2 in January–April compared with the same period of 2025. If retail demand remains strong while exports lag, the trade deficit remains under pressure. This makes retail growth positive for VAT and business revenue but less positive for external balance.
The retail forecast for 2026 is constructive but not euphoric. Montenegro’s consumers are still spending, employment is supporting demand, and the summer season should add momentum. The constraint is inflation. A year of 7% nominal retail growth with 3.5% inflation is a decent consumption story. It is not yet a productivity story, an export story or a full real-income recovery.
