Montenegro is already an attractive investment destination, but it can achieve even greater results through improving the business environment with more efficient implementation of reforms and increased digitization of the economy, stated Remon Zakaria, the head of the European Bank for Reconstruction and Development (EBRD) office in Podgorica.
In an interview, Zakaria mentioned that the business environment could be enhanced through improvements in tax procedures, greater labor market flexibility, and further development of educational and healthcare policies.
To maintain a high level of growth, it is crucial to build on Montenegro’s traditional strengths, such as tourism and agribusiness. However, the country also needs to diversify its economy, including increased investment in renewable energy sources, Zakaria noted.
He emphasized that Montenegro has enormous potential in renewable energy sources. With its abundant sunshine and wind resources, the country can meet its energy needs and export clean energy to neighboring countries.
The country can also secure its future economy through the development of high-value-added sectors like information technology (IT) while simultaneously investing in sustainable infrastructure to improve connectivity, Zakaria believes.
Speaking about the latest EBRD forecasts, Zakaria stated that they indicate growth of 3.5% in the previous year and 3.7% for the current year. However, he now believes there will be an even better outcome, given that the first three quarters of last year exceeded their expectations.
Turist season and investment activity were particularly strong, and favorable weather conditions led to the recovery of electricity production. Household consumption and real net earnings also increased, aided by the raise in the minimum wage and the elimination of health insurance contributions in 2022. Zakaria emphasized the importance of sustaining this momentum in the current year.
Responding to a question about how political instability in the country has affected foreign investments, Zakaria stated that coalition negotiations and political standstills are part of the democratic process, and Montenegro is no exception. Foreign investors observe these developments with great interest and sometimes with a considerable degree of concern, he added.
EBRD, as a long-term partner of Montenegro, actively supports investments, policy reforms, and technical assistance, delivering over 70% of its financing to support investments in energy, transport, and sustainable infrastructure.
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