According to the latest projections of the World Bank, Montenegro will note a growth of gross domestic product of 10.8% this year, which is the strongest recovery in the region of Eastern Europe and Central Asia.
According to the report, Montenegro’s GDP will strengthen by an additional 5.6% next year and by another 4.8% in 2023.
Montenegro’s GDP, according to the World Bank, fell sharply last year, over 15%.
“After the deep recession in 2020, the Montenegrin economy is recovering faster than expected, with the projected double-digit growth rate for 2021. Vaccination, health protocols and open borders have helped revive tourism. However, unemployment remains high because the recovery has not yet hit the labor market, which limits the pace of poverty reduction again”, the World Bank said.
The massive issue of Eurobonds in December 2020 in the amount of 750 million euros, according to the report, eased financial pressures in 2021, along with a reduced fiscal deficit.
“Nevertheless, fiscal management is still critical because of the uncertainties,” the World Bank said.
Montenegro’s small, open and tourism-dependent economy has been hit hard by the pandemic and has suffered the biggest reduction in Europe – 15.3%, reversing economic growth and poverty reduction from several previous years, the institution said.
“The crisis has revealed and further exacerbated Montenegro’s structural weaknesses. During the five years before the crisis, growth averaged 4%, driven by large public investment and strong consumption growth. More than two thirds of Montenegro’s jobs are in services, which account for over 70% of value added,” the report said.