- President, Chamber of Economy of Montenegro
The declaration of the COVID-19 pandemic, early in 2020, announced major changes and soon the world has faced the crisis, which has left immeasurable health, social and economic consequences.
The pandemic has slowed down the world economy, caused disturbances in the global market, changed the way of doing business and behaviour, but also highlighted the weaknesses of national economies. To these external shocks the least resistant economies proved to be those that predominantly rely on tourism and related branches of industry, which was also the case with Montenegro.
The previous year was also marked by the closure of borders, whereas numerous companies were forced to suspend all or part of their economic activities. The disturbed supply chains and the fact that there was no tourist season last year resulted in a decline of GDP by 15.3%, the average number of employees by 13.2%, foreign direct investments by 14.8% and foreign trade exchange by 18.1%. The tourism and transport sectors were the most affected.
Immunization, which began in May this year, created good conditions for optimism regarding the economic recovery, as evidenced by 19.0% and 25.8% growth of GDP in the second quarter and in the third respectively. Business activity in the industry and trade sectors and especially in the tourism recorded improvement this year. According to the World Bank estimates, Montenegro’s economy will strongly recover this year, generating the expected growth of 10.8%, which is the highest growth rate in the Western Balkans region. The GDP growth rate is estimated at 5.6% and 4.8% in 2022 and 2023 respectively.
The Chamber of Economy of Montenegro was a reliable partner in difficult and challenging circumstances imposed by the pandemic and provided support to the Montenegrin economic entities. It participated in the creation of support measures to mitigate the consequences of the crisis adopted by the Government and through intensive communication with the regional chambers it contributed to the uninterrupted supply of markets and the cross-border flow of goods, while encouraging solidarity between businesses and the health systems.
The experience and changes we have witnessed in these two years are forcing us to reconsider attitudes and beliefs about development models and think about the ways to improve them. In addition to many adverse consequences it has left, the crisis has provided us with a number of opportunities and chances, which we must not miss. It has imposed faster dynamics in the implementation of the initiated reforms and the beginning of activities on creating preconditions for the economic recovery and faster economic growth. To this end, key measures to strengthen the general competitive advantages of the Montenegrin economy and resilience to external shocks should be aimed at diversifying the economic structure on which promising economic growth is based.
Investments in green energy i.e. hydro, solar and wind energy will provide more sustainable management of the environment and natural resources, as well as the use of the EU Green Deal funds. Organic agriculture, food industry, forestry and wood processing, year-round health tourism and digital transformation of the society provide opportunities for further diversification of the Montenegrin economy and presence on the international market. Development and investments in these sectors will mean both, the valorisation of comparative advantages, as well as the economically justified and sustainable use of natural resources that we have at our disposal. The Chamber will actively participate in the recovery process and I believe that by supporting companies to strengthen their capacities and overcome difficulties in doing business during the pandemic, we will contribute to increasing the employment and income of the state and economy, creating more competitive and free market and a healthy economy.05/24/2022