Montenegro, economic growth is expected

Published on 3. February 2023., News

The Government of Montenegro announced that all relevant international institutions predict that the economy of Montenegro will grow faster than the regional average in 2023, with improving conditions on the labor market, a gradual increase in the number of employees and a further drop in the unemployment rate below the pre-pandemic level.

This was stated in the Program of Economic Reforms for the period 2023 to 2025, and that document was published by the executive power. It was pointed out that tourism is expected to recover this year compared to the pre-crisis level.

As stated, a positive contribution to economic growth in the next three-year period will be provided by domestic demand, with half of this impact determined by private consumption, due to the accelerated growth of income in tourism, high growth of remittances, with a strong expansion of credit activity and growth of employment and wages.

They point out that the personal consumption of households will be strongly encouraged by the budget measures for 2023 and the planned medium term.

– Public spending in the coming period will be reflected by higher current spending and a strong increase in allocations for salary increases for some employees in the public sector. Gross investments will record a gradual recovery compared to the pre-crisis level, with the maintenance of a high level in the overall economic structure and a projected growth of 6.6% in the period from 2023 to 2025 – according to the Program of Economic Reforms.

They point out that additional contribution to growth in the medium term will be provided by net exports, that is, external demand, stimulated by strong expansion in tourism, favorable export performance, but will also be partially limited by stronger dynamics of import activity.

In 2023, tourism is expected to recover compared to the pre-crisis level.

Strong price growth of the most important Montenegrin export products on world markets and a larger production base in agriculture will determine the projected growth of goods exports of 8.2% in the next three-year period.

– Imports will be intensified (growth 4.9%), conditioned by stronger demand due to the high value of investments and strong growth in private consumption – concludes the Program of Economic Reforms for the period 2023 to 2025.