Data from the Central Bank indicates that household debt in Montenegro has surged to €2.5 billion, marking an increase of nearly 18% compared to the same period last year. This rise translates to an additional €390 million in debt year-on-year, highlighting a persistent reliance on borrowing despite salary increases.
Although the average monthly wage in Montenegro has surpassed €1,000, many households continue to face challenges in managing daily expenses and unexpected financial demands without resorting to bank loans. The composition of household borrowing reveals that consumer and cash loans constitute nearly half of all debts, while housing loans account for a smaller fraction. This suggests that the majority of citizens are incurring debt primarily for immediate financial needs rather than for long-term investments or property purchases.
Economic analyst Mirza Mulešković points out that the increase in minimum wages has enhanced borrowing capacity among citizens, leading to a heightened demand for loans. However, he cautions that the trend of borrowing for everyday expenses reflects underlying vulnerabilities in household financial health.
Mulešković emphasizes the necessity for Montenegro to diversify its economy and invest in more productive sectors, which would foster conditions conducive to increased savings and investment. Until such changes occur, the reliance on credit is expected to persist among many households.
