Montenegro is expected to face a budgetary shortfall of €7-8 million to finance a €100 one-off payment to pensioners, which is scheduled for December. This financial obligation adds pressure to the country’s already constrained fiscal resources.
The estimated total cost of the pension disbursement could reach approximately €12-13 million, based on data indicating there are around 129,000 pension beneficiaries, as reported by Marko Sošić, a researcher at Institut Alternativa. This figure includes about 11,000 pensioners living abroad, although the government has yet to clarify their eligibility for this payment.
According to Sošić, only about €5 million of Montenegro’s current budget reserve is genuinely unallocated, suggesting that most of the additional funding needed would have to come from reallocating other budget items. As of September 28, neither the Finance Ministry nor the prime minister’s office had publicly disclosed a specific funding source for this initiative.
The initial budget for 2026 allocated €39.87 million for the current reserve. However, a significant portion has already been designated for various programs—approximately €21 million, including €10.6 million for the Credit Guarantee Fund and €4 million for airline promotion support.
By July, at least an additional €14 million had been committed for other expenditures, which included around €5.4 million for Independence Day celebrations and related events, along with €3.5 million earmarked for wildfire response efforts.
Sošić indicated that the pension payment might not necessitate a supplementary budget if funds can be reallocated effectively from existing appropriations. This situation presents an immediate challenge of managing expenditure rather than an issue of overall fiscal capability.
This year, Montenegro has experienced improved tax revenue, with gross Tax Administration earnings nearing €1.2 billion in the first eight months, representing an increase of approximately €98 million compared to the previous year. Nevertheless, various fiscal pressures are anticipated as the government prepares for 2027.
The administration is also working on its proposed Euro Model, which includes minimum net wages set at €1,000, €1,250, and €1,400. Furthermore, reductions in fuel excise duties have already impacted mineral-oil tax revenue.
The pension payment itself is relatively minor in relation to the overall budget and is not expected to jeopardize fiscal stability independently. However, its funding has gained significance as Montenegro enhances public finance controls in anticipation of EU accession and prepares for a more extensive investment program.
If the total cost of the pension payment approaches €13 million, and only €5 million remains unallocated in reserves, the government will need either higher-than-expected revenue or cuts in other areas to meet this obligation. The pressing issue is not merely whether Montenegro can afford this payment but rather how it can transparently secure funding without compromising other budget commitments.
