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Montenegro: 2025 Article IV Consultation-Press Release; and Staff Report

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  • International Monetary Fund

Abstract

The 2025 Article IV Consultation highlights that Montenegro's economy has shown resilience following the pandemic, with growth averaging 9 percent annually from 2021–2023, driven by tourism recovery and affluent migrant inflows. However, growth moderated to 3.2 percent in 2024 and 2025 due to softening tourism and rising inflation. Fiscal challenges have emerged, with the deficit projected to widen to 3.6 percent of gross domestic product (GDP) in 2025, driven by reduced pension contributions under the Europe Now programs. Public debt, which declined post-pandemic, is expected to rise gradually, reaching 65 percent of GDP by 2030. Structural reforms are critical to address long-term spending pressures from aging, health, and climate change. The banking sector remains healthy, but rapid credit growth and rising real estate prices warrant close monitoring. EU accession, targeted for 2028, offers an anchor for reforms to diversify the economy, enhance fiscal sustainability, and improve resilience to external shocks. Climate adaptation and investment in renewable energy are essential to mitigate risks and maintain competitiveness.

Suggested Citation

  • International Monetary Fund, 2025. "Montenegro: 2025 Article IV Consultation-Press Release; and Staff Report," IMF Staff Country Reports 2025/304, International Monetary Fund.
    • Handle: RePEc:imf:imfscr:2025/304
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