Montenegro Overview One of the world’s fastest growing tourist economies
Montenegro represents possibly one of the most exciting investment opportunities in the Mediterranean. With it’s beautiful Venetian coastal towns and renaissance charm, Montenegro is both an irresistible destination and a serious investment opportunity for those considering an overseas property purchase.
The Republic of Montenegro was part of the former Yugoslavia and is situated across the Adriatic Sea opposite the Italian coast. It has a 238 km coastline with stunning golden beaches, breathtaking lakes and majestic mountain ranges. The country is home to some exciting ski resorts and the world’s second deepest canyon.
The Montenegrin government’s objective is to continue to pursue a strategy which is business-friendly, with minimal state interference and an open economy with low taxes.
Montenegro is a services-based economy, with approximately 60% of GDP generated in the services sector. Montenegro has, and continues to undertake a wide ranging programme of structural and institutional reforms, which have enabled it to benefit from robust economic performance. As such, the World Bank noted: “In 2007, Montenegro was one of the world’s fastest growing non-oil economies” (source: World Bank, Report No. 46660-ME, November 2008).
Indeed, the country has seen strong levels of GDP growth at 10.7% and 7.5% in 2007 and 2008 respectively. Further, while Montenegro is not part of the Eurozone, it has adopted the Euro as its sole legal tender which has helped to control inflation in recent years.
Robust economic performance has also led to improved social indicators with substantially increased wages and unemployment dropping from 19.7% in 2005 to 10.7% in 2008.
“The Government of Montenegro, which was re-elected for another four-year term in March 2009, is actively pursuing a low tax economy with sustainable growth in a safe and stable environment and is working towards full EU and NATO membership in the near future. Since independence in 2006 an ambitious program of wide-ranging economic and bureaucratic reforms, along with investment in infrastructure, is making Montenegro an investor friendly country attracting the highest FDI per capita in the region.” Mr Branimir Gvozdenovic, Minister for the Environment
Continued Growth in Tourism
According to the WTTC, between 2010 and 2019, Montenegro’s travel and tourism economy is estimated to grow 6.2% per annum in real terms. The WTTC also ranks Montenegro among the world’s top ten countries for tourism demand over the next decade. WTTC/Oxford Economics predict that Montenegro’s annual growth will be second only to that of China but will outpace that of India. Despite significant economic progress, with its large leisure and real estate sectors, Montenegro is exposed to global recessionary pressures. Worldwide FDI started to shrink in early 2008, however, by the end of 2010 positive economic performance is expected to return, with stronger levels of growth anticipated in Montenegro than in the Euro area.
Location
Montenegro’s unique geographical positioning enables it to attract visitors and second home buyers from both east and west; its Mediterranean climate and exceptional coastline, with an abundance of natural and historical features, are acknowledged by developers and hospitality operators alike, as fundamental, long term attributes which make Montenegro highly attractive as an investment location today.
As global economic growth returns, Montenegro is poised to continue to flourish as a high-end tourism destination. With branded hospitality, extensive leisure amenities and improved infrastructure, residential prices will begin to reflect real quality and value in the market place, and subsequently allow price growth to continue.