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Strong Recovery in Tourism with the challenge of high inflation – The EBRD predicts

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Growth in Montenegro this year will be below last year’s level, the challenge remains high inflation, while tourism will recover strongly, according to the European Bank for Reconstruction and Development (EBRD).

EBRD director for economics, strategies and policies, Artur Radziwill, said that the bank sees potential for growth and favorable circumstances in Montenegro.

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The annual growth will be from three to four percent, which is a valuable result, but the country is not yet at the level of the EU living standard. There are still challenges for policy makers – said Radziwill during the presentation of the latest Transition Report for 2022/2023 entitled ”Unusual Business“ at the Hilton Hotel.

He said that this year’s growth will be below last year’s level, with some percentages or trends falling compared to what the EBRD predicted, even in the fall of last year.

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The European Union (EU) is affected by what is happening around us. There is a risk of recession, especially in the German economy, which is the driving force of the European economy. This does not provide a favorable context for Montenegro – Radziwill assessed.

He said that high inflation is caused by external causes, energy and food prices. Perhaps inflation also affects the household budget, which means reduced consumption. He stated that the EBRD sees a strong recovery in tourism, where it is certain that revenues will reach record levels from 2019.

The recovery was impressive in 2021 and last year. The growth continues and Montenegro will achieve better success compared to the countries of the region. He said that progress is needed in order to eliminate shortcomings, as well as to encourage development that helps to approach the European level of standards and income.

It is up to the policy makers to speed up the reforms, after solving the challenges of political instability that we have faced in the past years. The head of the EBRD in Montenegro, Remon Zakaria, said that the bank opened an office in Montenegro in 2006, and by then they had invested over EUR 724 million in 81 projects.

Our strategy has three key priorities, related to the provision of aid and transition, strengthening competitiveness and helping in connectivity and integration – said Zakaria and added that these are their goals until 2026.

He stated that the EBRD invested EUR 23 million in six projects in Montenegro last year, of which 75 percent are defined as green projects. Montenegro really needs this in order to improve the quality and equipment that exists in order to improve the railway infrastructure – said Zakaria.

As he specified, the EBRD is focused on political dialogue and related activities that connect their strategic priorities and create a stimulating environment for investment. He recalled that they signed an agreement with Alter modus, intended for young entrepreneurs, as well as a credit line to support small and medium-sized enterprises.

We provide assistance in improving the regulatory framework, as well as assistance in the field of road safety – said Zakaria. He stated that they helped 41 small and medium enterprises last year, mostly in connection with the digital component.

The Transition Report is the EBRD’s leading publication that analyzes developments in the implementation of structural reforms and economic trends in 36 economies in which the EBRD invests, including Montenegro.

The title of this year’s report, Business as usual, among other challenges that businesses and policymakers will continue to face for some time to come, includes the tectonic changes associated with the war in Europe, i.e. rising gas prices, forced migration, high inflation and changes in the supply chain.


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