Sitemap

The Glass Is Half-full

The largest ever drop in output in the Western Balkans is obviously bad news. Yet the readiness of foreign investors to continue investing and believing in the Montenegrin economy is the light at the end of the tunnel.

The COVID-19 pandemic has reversed initial positive economic growth expectations and Montenegrin output is expected to have declined by 14.3% in 2020. According to projections, the real GDP growth rate in 2020 will be negative (-14.3%) and will hit all segments of the economy. With a vaccine still not in sight, it seems that 2021 will be a year of very slow rebounds and the economic future has never seemed more uncertain than it does now.

As the researchers of the Vienna Institute for International Economic Studies (wiiw) point out, the COVID-19 pandemic has been exacting a heavy toll on the Montenegrin economy, largely because of the country’s reliance on its tourism sector. Indeed, the strong second wave of the pandemic has resulted in the worst tourism season on record. When tourism failed, it had serious repercussions for employment and private consumption. Foreign direct investment is also in decline.

The latest World Bank report suggests that, due to this crisis, already elevated public debt will soar to a new high, requiring strong expertise from the new government, particularly with regard to fiscal and debt management. If the pandemic becomes subdued by the summer of 2021, the economy is forecast to grow strongly during that year, but it will be 2022 before the full losses in GDP will be recovered, the World Bank report concludes.

The new Montenegrin government will need to take measures to enhance human capital, build stronger institutions and strengthen the rule of law. The pandemic just made these tasks more visible and urgent

In this grim situation, it is still good to know that the community of foreign investors already operating in Montenegro do not intend to slowdown or abandon their investments. It could be said without a doubt that foreign investors believe that the Montenegrin economy is attractive and has strong growth potential.

Yet, along with the challenges created by the health crisis, the new Government will be faced by some other demands that were not fulfilled during the previous period and are crucial. Among them are ensuring the rule of law and a predictable business environment, which implies the transparency of all activities of the administration, reducing corruption and strengthening control over conflicts of interest.

This list also includes improvements to the judicial system, which needs to become much more efficient, and combatting the grey economy. On top of all that is digital transformation, which – as practise to date suggests – has plenty of room for improvement, starting with eGovernment.

In short, the new government has accepted to shoulder a heavy burden. There has probably been no Montenegrin government in recent history that has faced a more complex situation, much more intricate and multifarious than was the case with the global financial crisis. However, steps leading to an economic rebound are visible and are no different than before the crisis. The COVID-19 pandemic merely exposed incomplete tasks.

Related Articles

Christoph Schoen, MFIC President (Addiko Bank CEO)

Every Crisis Also Has Opportunities

We believe that the Montenegrin economy will continue to be strongly influenced by investments in the coming years. It is therefore of particular importance...

Ambassador Oana-Cristina Popa, Head Of The EU Delegation To Montenegro,

Friendships Are Forged In Crises

For Montenegro, as the most advanced EU membership candidate country, all the opportunities offered by the new methodology for accession are at the country's...

Radoje Žugić, Governor Of The Central Bank Of Montenegro

We Provide Our Maximum Contribution To Stability

The Montenegrin economy recovered relatively quickly from the negative impact of the 2008 global financial crisis. With the discovery of a vaccine, we expect...

Branko Mitrović, General Manager, Telenor Montenegro

Digital Transformation Is Key To Development

We view the digital transformation process that drives change as a chance for the accelerated recovery and growth of the Montenegrin economy, as well...

Emanuel Salinas, World Bank Country Manager For BiH And Montenegro

Tight Spot

Over the medium and long term, the focus must be on improving the economy’s resilience by addressing its internal and external imbalances and boosting...

Lovćen Group

Committed To Values And Clients

In the year 2020, which was marked by the COVID-19 pandemic, the Lovćen Group remained consistent in the implementing of its strategic goals and...

Jaap Sprey, Head Of The EBRD In Montenegro

We’re Here To Help

The epidemic has highlighted that Montenegro requires a more diversified economy with less reliance on tourism, while the tourism sector needs serious measures to...

Invest In Portonovi

Montenegro’s New Idyllic Waterfront Village

With crystal-clear waters and a dramatic mountain landscape, the Montenegro coastal region is an investment opportunity that outmuscles southern France, Spain and Portugal Over the...

More...

Haunted March

Ferragosto, the feast of the Holy Mother of God, is a special day in Italy, and on that day, 15th August, the entire country...

Bojan Elek, Researcher At The Belgrade Centre For Security Policy

Criminals Must Remain Behind Bars

What is lacking in order for the public to believe that this is really a showdown and not just another media manipulation is the...

Marko Nicović Lawyer, Former Chief Of Police Of The City Of Belgrade

Supporters And Judges

Criminals under the guise of “supporters” are a big problem, but they’ve strengthened under the protection of part of the establishment. Testifying to this...

Vladimir Đukanović, Serbian Progressive Party MP, Lawyer

Courts Are Key

It is very important to have cooperation between the executive government and the judiciary in the segment of gathering enough solid evidence with which...

News

Famous World Fashion Designer Philippe Plein visits The Serbian Company Luss Textile

Serbian company Luss Textile​ is holding talks to become a supplier to German fashion group Philipp Plein, the Serbian...

Tamara Klarić And Bogdan Stevanović: A Good Idea Inspired People To Do Good Deeds

This year, Trag Foundation is presenting the 14th VIRTUS Philanthropy Award. Last year, the VIRTUS award for individual contribution...

First Flight To The New Destination In Switzerland Air Serbia Begins Flying To Geneva

On 1 March, with the JU 470 flight carried out with an Airbus A319, Air Serbia commenced direct flights...

Mining Represents The Future Of Serbia

In a drive to increase the share of mining's contribution to the country's GDP from 1.9 to 3.5 per...

Serbia-Bulgaria Gas Interconnection Important For Whole Region

Deputy Prime Minister and Minister of Mining and Energy Zorana Mihajlovic talked today during her working visit to the...

First Flight To The New Destination In Switzerland Air Serbia Begins Flying To Geneva

On 1 March, with the JU 470 flight carried out with an Airbus A319, Air Serbia commenced direct flights...

Mining Represents The Future Of Serbia

In a drive to increase the share of mining's contribution to the country's GDP from 1.9 to 3.5 per...

Serbia-Bulgaria Gas Interconnection Important For Whole Region

Deputy Prime Minister and Minister of Mining and Energy Zorana Mihajlovic talked today during her working visit to the...

Europe And COVID-19 Vaccination Passports

European Union leaders moved closer on Thursday to an agreement on certificates showing that citizens have been vaccinated against...

AmCham Elects New Board Members

Annual HERO Award honours health workers, true heroes of today’s world At today’s General Assembly Meeting, members of the American...

First Flight To The New Destination In Switzerland Air Serbia Begins Flying To Geneva

On 1 March, with the JU 470 flight carried out with an Airbus A319, Air Serbia commenced direct flights...

Mining Represents The Future Of Serbia

In a drive to increase the share of mining's contribution to the country's GDP from 1.9 to 3.5 per...

Serbia-Bulgaria Gas Interconnection Important For Whole Region

Deputy Prime Minister and Minister of Mining and Energy Zorana Mihajlovic talked today during her working visit to the...

Europe And COVID-19 Vaccination Passports

European Union leaders moved closer on Thursday to an agreement on certificates showing that citizens have been vaccinated against...

AmCham Elects New Board Members

Annual HERO Award honours health workers, true heroes of today’s world At today’s General Assembly Meeting, members of the American...