Standard & Poor’s (S&P) has confirmed Montenegro’s credit rating with stable outlook, maintaining the B+ rating, according to a statement from the Ministry of Finance.
The Ministry, led by Novica Vuković, views the confirmation of the credit rating as encouraging, representing a boost for the continuation of positive economic trends. This, they note, will be important for improving citizens’ living standards, attracting larger investments, and realizing significant capital projects.
Montenegro is rated as the most advanced country in the Western Balkans in the EU accession process and has made progress in several areas related to EU laws and obligations. Successfully closing key chapters could further accelerate progress in other areas still under negotiation, according to the statement. Economic analyst Mirza Mulešković believes this reflects that Montenegro remains stable in terms of public finances, adding that staying on the European path is crucial for long-term stability and development.
“This rating sends a message to investors that Montenegro is becoming a more stable market, but also to decision-makers that much more needs to be done to improve this situation, and the European path must not be abandoned. Based on feedback from investors, there must be more focus on the rule of law and creating a business-friendly environment, which will help create a more dynamic real economy and, in turn, improve the credit rating,” Mulešković commented.
Projections
The Ministry of Finance expects Montenegro’s economic growth to reach 3.7% this year, compared to 3.4% last year, driven by increased investments and consumption. However, projections made by the Prime Minister’s economic policy advisor Milena Milović at the end of January were slightly different.
“In the fiscal sphere, there is stability in public finances, continuous budget revenue growth, and a decrease in public debt, all presenting a positive picture. The Ministry’s projections indicate that economic growth will continue, projected at 4.8% for 2025, with continued unemployment reduction,” Milović stated.
Economics professor Maja Baćović deemed these projections overly optimistic, pointing out that Montenegro’s economic growth depends on export trends and investment activities. Given the decline in exports last year, Baćović does not expect a better situation, particularly with the ongoing overhaul of the Pljevlja Thermal Power Plant and increased electricity imports. She noted that faculty members are working on research with a macroeconomic model that aligns more closely with the projections of the European Bank for Reconstruction and Development (EBRD), which expects a 2.9% growth for this year.
“Economic growth makes sense if domestic production is strengthened, because if you spend more on imports, you are strengthening foreign production,” Baćović said, adding that exports account for less than 20% of GDP, with 66 cents of every euro spent going to imported goods.
Investments
The Ministry of Finance reiterated that investments remain a key driver of growth, alongside ongoing projects in real estate, energy, and tourism, which continue to attract capital.
“If Montenegro maintains the current investment cycle and external conditions remain stable, economic growth is expected to average around 3% annually from now until 2028,” the Ministry stated.
They also mentioned that tourism contributes more than a quarter of the nominal GDP, and considering indirect effects, its impact is even greater. The S&P report also mentioned that Montenegro’s credit rating could improve if fiscal results exceed current expectations, along with a decline in net public debt. This could happen if strong economic growth is achieved. Over the past few years, foreign direct investments have covered about 50% of the cumulative current account deficit, and this trend is expected to continue. Investments remain concentrated in the tourism, real estate, and energy sectors.
The banking sector has remained liquid, with non-performing loans falling below 4.7% by the end of September last year, the lowest level ever recorded, and the capital ratio was about 19.3%. The stability and risk management capability of the banking sector are strengthened by the dominance of foreign bank subsidiaries.
The Ministry of Finance emphasized that the confirmation of the credit rating is particularly significant after the challenges posed by temporary state financing and global uncertainties.
“We remain committed to maintaining macroeconomic and financial stability and improving the economic standard of citizens,” concluded the Ministry.
