Despite a 6.14% increase in foreign direct investment (FDI) inflows in the first half of 2025 compared to the same period last year, the trend in Montenegro is not viewed as favorable, according to Prof. Dr. Vasilije Kostić, president of the Montenegrin Employers’ Association and economic analyst. He notes that capital outflows were stronger than inflows, leading to a net FDI inflow of €235.26 million—a 4.15% decline from the previous year.
Preliminary data from the Central Bank of Montenegro (CBCG) show total FDI inflows of €448.57 million, with €213.31 million flowing out of the country. Outflows include €51.86 million from residents investing abroad and €161.45 million from non-residents withdrawing funds.
Kostić emphasizes that the net inflow is a more relevant indicator for development than gross inflows, since capital outflows can create financial instability and negatively impact the economy. He highlights that a significant drop in investments in enterprises and banks—over 35%—is particularly concerning.
Montenegro’s FDI structure shows that of €267.72 million in equity investments, €228.86 million (up 14.46% YoY) went into real estate, while only €38.86 million was invested in companies and banks, down 35.12% from last year. Kostić warns that such a skewed investment pattern can distort economic development, pushing up real estate prices and inflation while limiting industrial and banking growth.
He stresses that Montenegro urgently needs larger FDI inflows, particularly directed toward productive sectors. Policy measures, including fiscal incentives, should stimulate investment in businesses and deter excessive real estate speculation. Political stability and a clear development strategy are also essential to attract secure, long-term investment.
Kostić concludes that without coordinated policies, the current FDI trend—favoring real estate over productive sectors—risks creating market distortions, higher costs for citizens, and missed development opportunities.
