In its latest report, the World Bank (WB) has revised the economic growth forecast for Montenegro up to 4.8 percent.

“This is 1.5 percentage points more compared to June forecast,” stated the Europe and Central Asia Economic Update published today by the World Bank.

According to the report, the World Bank expects to see a 3.2 percent economic growth next year and a 3.1 percent growth in 2025, up by 0.1 point and 0.2 points respectively compared to the projections published in June.

The WB stated that Montenegro’s growth was expected to remain strong at 4.8 percent in 2023, underpinned by private consumption and service exports, while investments remain subdued.

However, the slowing of the global economy is weighing down on Montenegro’s outlook. Over 2024-25, declining private consumption growth is expected to result in a slower average growth of 3.2 percent.

“On the fiscal side, while one-off revenues will result in a lower-than-planned fiscal deficit of 2 percent of GDP in 2023, the fiscal deficit is expected to remain elevated at 3.9 and 3.6 percent of GDP in 2024 and 2025, respectively,” stated the report.

Public debt is expected to increase from 62.1 percent of GDP in 2023 to 66.1 percent of GDP in 2024.

“Given the tightening of global financial conditions and Montenegro’s sizable financing needs over 2023-25, cautious fiscal management is needed, particularly with respect to expenditures, including implementing the pension and public administration reforms,” stated the Bank.

The World Bank believes that political challenges are major domestic risks, stating that the severity of challenges ahead, however, requires strong political and economic stewardship through carefully designed and well-costed policies.

Economic growth for the emerging market and developing economies across Europe and Central Asia has been revised up to 2.4 percent for 2023, in the World Bank’s latest economic forecast for the region.