The World Bank has raised its 2025 growth forecast for Montenegro’s economy to 3.3%, up from 3.0% in its spring projections. The Bank expects growth of 3.2% in 2026 and 2027, supported by private consumption, rising real wages, and continued investments in infrastructure and renewable energy.
Montenegro remains highly exposed to external shocks due to its small, open, and euroized economy, with tourism dependence increasing vulnerability. Inflation has been higher than expected, fiscal space is limited, and public debt remains stable at around 60% of GDP. EU accession continues to drive reforms and long-term development, while Montenegro’s recent entry into the Single Euro Payments Area (SEPA) is expected to strengthen financial integration and investor confidence.
The World Bank warns that the current account deficit is likely to remain elevated, increasing reliance on external financing. Maintaining fiscal sustainability, improving risk management, and implementing targeted policies to reduce poverty are considered critical amid geopolitical and trade uncertainties.
For the wider Western Balkans, the Bank projects moderate economic acceleration in 2026 and stronger recovery in 2027, driven by exports and investments, with regional growth averaging around 3% in 2025 and increasing to 3.6% by 2027.
Labor market challenges persist, with high unemployment (over 10%) and low workforce participation (below 55%), particularly among women, youth, and older adults. Demographic decline could reduce the working-age population by nearly 20% by 2050, potentially causing a shortage of over 190,000 workers in the next five years.
The World Bank emphasizes that unlocking economic growth requires investment in infrastructure, education, healthcare, energy, and transport; reforms to public administration; strengthening the private sector; fostering competition in key industries; supporting innovation and startups; and mobilizing private capital to drive digital and green development.
