“Montenegro’s fiscal policy faces significant issues as the country continues to accumulate debt year over year. Our budget deficit is on the rise, and it is projected to reach approximately 300 million euros this year, while obligations for loan repayments from previous periods will push the total significantly over one billion euros. This figure is considerable for Montenegro,” stated Jovo Rabrenović, a market analyst and Doctor of Economic Sciences, during a television interview.

He emphasized that Montenegro has encountered numerous challenges, with each year presenting more difficulties than the last in various aspects, particularly in the economic sector, as reported by eKapija.me.

“The economic framework of Montenegro is influenced by many factors, mainly internal political dynamics, which impact not only the economy but also all sectors within the country. Additionally, we must consider regional and global political factors and their implications for Montenegro,” Rabrenović assessed.

He noted the complexity of controlling and predicting economic outcomes while the Montenegrin economy is facing such uncertainties.

“Just when it seems things couldn’t get any tougher, they do. Montenegro in 2025 will face numerous challenges that the country’s political elite must address before citizens can pursue a quality of life that meets their aspirations,” Rabrenović explained.

He underscored that fiscal policy represents one of the most pressing challenges for Montenegro, linking it to events from recent years, particularly last year’s circumstances.

“The issues with public finances are critical, as is inflation. Although there’s ongoing debate about whether inflation exists or not, I can’t agree with that perspective because the inflation rate in Montenegro raises serious questions. It’s crucial to consider whether the inflation reported by Monstat is perceived as acceptable by consumers and citizens, as personal inflation is often significantly higher than the general, state-level inflation,” Rabrenović pointed out.

A major concern for Montenegro is the escalating public spending, which reportedly increases annually.

“When comparing the periods of 2023/2024, similar to Europe USA periods 1 and 2, we see an increase in absolute terms of 500 million or approximately 17.2 percent in relative terms. This increase in public spending does not necessarily indicate that the government has invested more in capital projects and infrastructure, which is unfortunately not the case. Much of this spending consists of salary and pension increases that do not stem from new value created within the state but are rather funded through borrowing, which is the least favorable form of expenditure,” Rabrenović elaborated.

He stressed that Montenegro needs to generate new value to meet its obligations and repay debts but lamented that the government has not been proactive in seeking new economic ideas and projects for improved functioning.

“Montenegro lacks both domestic and foreign investments. Current activities focus mainly on consumption, such as developing shopping centers and other facilities that promote consumption without generating the true values needed for Montenegro,” he assessed, asserting that the nation requires substantial investment.

“Investments that could enhance Montenegro, such as ski resorts and agricultural projects, are essential. These would boost employment and productivity, enabling young people to find jobs and ensuring financial security for their futures and retirements. Regrettably, such initiatives are absent from our country,” Rabrenović concluded.