Page 57 - SE Outlook Regions 2023

2.7.2 External environment

Montenegro’s current account deficit remains among the highest in
Southeast Europe and is seen at 14% of GDP in 2023, up from 13.8%
in 2022, according to the IMF.

The World Bank expects that the current account deficit will reach
10.3% of GDP in 2023 compared to 10.2% in 2022.

“While higher energy prices are disproportionately affecting the poor,
they are also supporting a reduction in the trade deficit as Montenegro’s
growing electricity capacities are used for energy exports. These
factors, together with exports of tourism and transport services are
projected to support a reduction in the current account deficit to 9.7% of
GDP in 2024,” the World Bank has said.

According to the latest available central bank data, Montenegro's
current account gap increased by 90.4% y/y to €478.1mn in the first
nine months of 2022. Exports increased by 53.3% y/y to €568.9mn in
January-September, while imports decreased 30.4% y/y to €1.78bn.

The net primary income posted a €102.2mn surplus, increasing by
33.5% y/y. Net secondary income increased 22.2% y/y to €341.5mn.
The services account surplus increased 33.1% y/y to €1.07bn.

The financial account posted a €3.5mn deficit, reversing a €85.5mn
surplus. Net foreign direct investment was -€599mn versus -€352.36mn
a year earlier.

Meanwhile, Montenegro’s foreign trade gap widened by 39.4% y/y to
around €2.4bn in the first ten months of the year, according to statistics
office data. The export-import coverage ratio was 19.6%, versus 16.6%
a year ago.

In the first ten months, Montenegro’s imports soared 44.2% y/y to
€2.94bn, while exports expanded 69.9% y/y to €576.65mn. The
majority of exports consisted of mineral fuels and lubricants, while
machines and transport equipment comprised the top imports.

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