The European Bank for Reconstruction and Development (EBRD) has lowered its forecast for this year's growth of the Montenegrin economy to 2,6 percent in its latest report.
This is 0,3 percent lower than in February, when the EBRD forecast economic growth of 2,9 percent.
In the latest report, which the Mina-business agency had access to, the EBRD predicts that the Montenegrin economy will grow by 2,7 percent next year, which is also 0,3 percent lower than in February, when growth of three percent was expected.
According to EBRD estimates, the Montenegrin economy grew by three percent last year.
The EBRD, in a special section of the report relating to Montenegro, stated that real gross domestic product (GDP) growth slowed significantly from 6,3 percent in 2023 to three percent last year, due to a significant slowdown in tourism after a record season in 2023.
"Growth last year was driven by private consumption and investment, supported by expansionary fiscal policy, rising wages and pensions, and ambitious infrastructure projects. However, net exports fell as the wave of tourists and immigrants from Russia and Ukraine weakened," the report said.
The EBRD said inflation had fallen significantly, from a peak of 17,5 percent in November 2022, to one percent in September last year, before rising again to 2,8 percent in February.
"Real GDP growth is projected at 2,6 percent this year and 2,7 percent next year. More moderate growth is expected due to price increases in the tourism sector, driven by large wage increases, which could limit demand," the report added.
Also, the reconstruction of the Pljevlja Thermal Power Plant (TPP), which provides around 40 percent of the country's electricity, will significantly reduce domestic electricity production and lead to a large increase in electricity imports.
"On the other hand, continued wage growth could further boost consumption growth, but also widen the trade deficit," the EBRD said.
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