Montenegro - Economy

Economy

The economy of Montenegro is mostly service-based and is in late transition to a market economy. According to the International Monetary Fund, the nominal GDP of Montenegro was $4.114 billion in 2009. The GDP PPP for 2009 was $6.590 billion, or $10,527 per capita.

GDP grew at an impressive 10.7% in 2007 and 7.5% in 2008. The country entered a recession in 2008 as a part of the global recession, with GDP contracting by 4%. However, Montenegro remained a target for foreign investment, the only country in the Balkans to increase its amount of direct foreign investment. The country is expected to exit the recession in mid-2010, with GDP growth predicted at around 0.5%. However, the significant dependence of the Montenegrin economy on foreign direct investment leaves it susceptible to external shocks and a high export/import trade deficit.

In 2007, the service sector made up for 72.4% of GDP, with industry and agriculture making up the rest at 17.6% and 10%, respectively. There are 50,000 farming households in Montenegro that rely on agriculture to fill the family budget.

According to Eurostat data, the Montenegrin GDP per capita stood at 41% of the EU average in 2010.

Aluminum and steel production and agricultural processing make up for most of the industrial output.

Tourism is an important contributor to Montenegrin economy. Approximately one million tourists visited Montenegro in 2007, resulting in €480 million of tourism revenue. Tourism is considered the backbone of future economic growth, and government expenditures on infrastructure improvements are largely target towards that goal.