Montenegro
COVID-19 continues to cast its shadow well into 2021, with GDP contracting by 6.4% in Q1. Economic recovery is also inhibited by the government’s failure to swiftly approve the country’s state budget for 2021. So far, it has only been able to adopt a draft budget for the year, with a projected 3% deficit. However, with the COVID-19 support measures, we expect that deficit to surge to 5.4%. Higher oil prices will stoke energy costs, which is why we expect this year’s inflation to increase to 1.7%. The pandemic-related uncertainties and the overcast prospects for the tourist season mean that we maintain our rather pessimistic GDP growth forecast in 2021 of 6.5%.
| FORECAST* | ||||||
|---|---|---|---|---|---|---|
| Main Economic Indicators | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 |
| Population, 1000 persons | 622 | 622 | 621 | . | . | . |
| GDP, real change in % | 5.1 | 4.1 | -15.3 | 6.5 | 6.0 | 4.0 |
| GDP per capita (EUR at PPP) | 14610 | 15680 | 13720 | . | . | . |
| Gross industrial production, real change in % | 22.4 | -6.3 | -0.9 | . | . | . |
| Unemployment rate - LFS, in %, average | 15.2 | 15.1 | 17.9 | 17.5 | 16.0 | 16.0 |
| Average gross monthly wages, EUR | 766 | 773 | 783 | . | . | . |
| Consumer prices, % p.a. | 2.6 | 0.4 | -0.3 | 1.7 | 1.7 | 1.5 |
| Fiscal balance in % of GDP | -3.9 | -2.0 | -11.1 | -5.4 | -4.0 | -3.0 |
| Public debt in % of GDP | 70.1 | 76.5 | 105.3 | . | . | . |
| Current account in % of GDP | -17.0 | -14.3 | -26.1 | -20.9 | -18.6 | -16.1 |
| FDI inflow, EUR m | 415 | 372 | 463 | . | . | . |
| Gross external debt in % of GDP | 163.7 | 169.0 | 224.1 | . | . | . |
Basic data are continuously updated.
* Forecasts are changed beginning of April, July and November.
See Press Conferences.
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Monthly Report No. 7-8/2021
Vasily Astrov, Alexandra Bykova, Rumen Dobrinsky, Selena Duraković, Richard Grieveson, Doris Hanzl-Weiss, Gabor Hunya, Branimir Jovanovic, Niko Korpar, Sebastian Leitner, Isilda Mara, Olga Pindyuk, Leon Podkaminer, Sandor Richter, Bernd Christoph Ströhm and Maryna Tverdostup
wiiw Monthly Report No. 7-8, July-August 2021
42 pages including 4 Tables and 15 Figures
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MONTENEGRO: Tourism to drive recovery in 2021
Bernd Christoph Ströhm
in: Darkest before the dawn?
wiiw Forecast Report No. Spring 2021, April 2021 , pp. 98-101
Details and Buy
After suffering Europe’s deepest recession last year (-15.2%), Montenegro’s economic bounce-back is still subject to numerous risks and is crucially dependent on a successful tourist season. The country’s tourist industry is particularly reliant on CESEE inter-regional arrivals, mainly from Serbia and BiH. However, given BiH’s slow COVID-19 vaccination campaign, realistically in 2021 the country is only likely to benefit inter-regionally from Serbian arrivals. Besides, so far Montenegro has scarcely benefited from any Russian arrivals, as there is a formal ban on flights between the two countries. COVID-19 continues to cast its shadow well into 2021, with GDP contracting by 6.4% in Q1. Economic recovery is also inhibited by the government’s failure to swiftly approve the country’s state budget for 2021. So far, it has only been able to adopt a draft budget for the year, with a projected 3% deficit. However, with the COVID-19 support measures, we expect that deficit to surge to 5.4%. Higher oil prices will stoke energy costs, which is why we expect this year’s inflation to increase to 1.7%. The pandemic-related uncertainties and the overcast prospects for the tourist season mean that we maintain our rather pessimistic GDP growth forecast in 2021 of 6.5%.