Montenegro » Introduction

The economy of the country is to some extent based on its agriculture. The agricultural goods are tobacco, olives, potatoes, grains, citrus fruits, grapes and so on. The industries that are rising very quickly and enhancing the economy of Montenegro are steel making industry, aluminum industry; coal mining industry, agricultural processing industry, tourism industry, textiles industry etc. A major portion of the Montenegrin revenue depends on the export trade.

The Republic of Montenegro detached its economy from the former Yugoslavia's federal control and from Serbia during the Milosevic era and maintained its own central bank, collected customs tariffs, and managed its own budget. On 2nd November 1999 the Yugoslav Dinar was replaced with the German Mark and then further on 1 January 2002 the Euro was adopted and made the official currency of Montenegro. This was in answer to mounting inflation across Serbia and Montenegro. Inflation has since reduced drastically.

The economy of Montenegro enhanced and grew due to the reform of the monetary sector in 2005. Tourism is becoming a main power in the Montenegrin economy and continues to nurture. The number of the visitors travelling to Montenegro was up by 39% in 2007 over the preceding year. A major political and economic issue has been the unemployment, though this has reduced considerably over recent years from 16.4% in 2006 to 11.35% in 2008, according to Government of Montenegro statistics.

Record tourist numbers of nearly 1.2m, have seen to increase in the foreign investment inflows and rising export sales from KAP, the country’s newly privatised aluminium plant, produced an official growth rate of 7 per cent in 2007 and it is expected to continue till 2008.

The economic outlook of Montenegro has brightened up since the fall of Slobodan Milosevic in 2000.The economic growth in 2005 was 4.1%, inflation 1.8% and unemployment 18.4%.

Agriculture is now mostly geared to domestic utilization. The country has a flexible mining trade that generates coal, copper ores, bauxite and more. The service industries are expected to be the future of Montenegro's economy. Up till 2016 the tourism sector in Montenegro in particular is expected to grow at 10% annually.

In 2007, gross domestic income per capita matured up to Euros 3,700, noticeably lesser than most new EU member states, with the exclusion of Bulgaria and Romania.