Montenegro’s gross domestic product (GDP) grew in the first quarter of this year by 6.1 percent compared with the same period last year, mainly thanks to household consumption growth, the Statistical Office reported yesterdayMonstat.
GDP for these three months amounted to 1.22 billion euros, while in the same period last year it was 1.03 billion. GDP recorded nominal growth of 18.2 percent, and after excluding the effect of inflation, real growth was 6.1 percent.
Household consumption, as one of the components of GDP, amounted to 1.09 billion euros in this quarter and was 207 million euros, or 23 percent, higher than in the same period last year. This refers to total spending by citizens, whether Montenegrin citizens, tourists, or foreigners with temporary residence permits (residence permits).
This rise in consumption was influenced by higher wages and other incomes of citizens, an increase in the number of tourists and their spending, as well as a rise in the number of foreigners with residence permits, especially from Ukraine and Russia.
GDP also includes government consumption, which increased from 232 million to 259 million euros, or 11.6 percent, over these comparable periods. Public spending on public projects grew at the level of inflation, so it did not affect real growth.
Gross fixed capital formation in the economy rose from 253 million to 286 million euros, which represents an increase of 13 percent and only slightly exceeds the inflationary effect.
The item that, in Montenegrin circumstances, almost always has a negative impact on GDP is the balance between imports and exports of goods and services. This balance was negative by 430 million euros over these three months, while in the same period last year the loss was 334 million euros. So the negative effect of this item increased by 28 percent.
Exports of goods and services amounted to 666 million dollars and increased by 178 million dollars, while imports rose by 273 million to 1.09 billion dollars. The reasons for the growth of this negative effect are increased imports of general consumer goods such as food by 30 percent, cars by 74 percent, beverages and tobacco products by 57 percent, petroleum products by 18 percent, clothing by 38 percent, and footwear by 67 percent.
Since exports of goods and services also include the spending of foreign tourists, this balance will be positive only during the third quarter (July, August, September), when it is a good tourist year.
Minister of Economic Development and Tourism Goran Đurović wrote yesterday on his Twitter account that growth of “an incredible 6.1 percent is an indicator of the work of the Government of Montenegro and proof that this country is on the right path.”
Recall that earlier the International Monetary Fund (IMF)improved its forecastfor Montenegro’s economy. According to its projections, the country’s economy was expected to strengthen by 9% in 2021.
Montenegro in second place for GDP growth
Yesterday Monstat also published a Eurostat table according to which Montenegro is in second place in terms of GDP growth, while Iceland is in first place with growth of 7.1 percent.
Eurostat keeps these data for the 27 member states, as well as for seven candidate countries and other European countries that have adapted their statistical data to its standards.
Iceland and Montenegro are followed by Spain with growth of 4.1%, Turkey with 4%, Cyprus with 3.4%, Malta with 3.1%, Norway with 3%, and Croatia and Denmark with 2.8% each. The average growth in EU member states was 1.1 percent.
As many as eight countries recorded negative growth, that is, an economic decline in this quarter. These are Estonia with minus 3.2 percent, Lithuania with 2.5 percent, Hungary with 0.9 percent, Germany and Ireland with minus 0.2 percent, as well as Poland, the Czech Republic and Finland, which saw an economic decline of 0.1 percent.
Among the countries in the region, after Montenegro, Croatia recorded the highest growth — 2.8 percent, followed by North Macedonia — 2.1 percent and Slovenia and Serbia — 0.7 percent each. Bosnia and Herzegovina, Albania and Kosovo are not included in Eurostat’s lists.