Montenegro Sets Economic Reform Program Aiming for €3.72 Billion by 2028

The Government of Montenegro approved the Economic Reform Program for the period from 2026 to 2028 during a session held yesterday. This program is deemed essential for meeting the economic criteria required for the country’s EU accession negotiations, according to official statements.

The Economic Reform Program serves as a guide for planning the nation’s economic policy and managing reforms aimed at maintaining macroeconomic stability, enhancing international competitiveness, and improving conditions for inclusive growth. The program is also a key component of the “fundamentals first” approach within Montenegro’s EU accession talks, particularly regarding compliance with the Copenhagen economic criteria.

Projected Economic Growth and Fiscal Outlook

According to preliminary projections from the Ministry of Finance, Montenegro’s economy is expected to achieve an average annual growth rate of 3.2 percent over the medium term. Specific forecasts indicate growth rates of 3.2 percent for 2026, followed by 3.1 percent in 2027, and 3.2 percent in 2028. The government plans to continue implementing measures from the Fiscal Strategy, focusing on enhancing control and rationalizing public spending, improving revenue collection through modernized tax administration, and combating the informal economy.

The fiscal framework for 2026 to 2028 outlines projected public revenues ranging from €3.5 billion (40.9 percent of GDP) in 2026 to €3.72 billion (39.7 percent of GDP) by 2028. The anticipated increase in public revenues is attributed to rising consumption, strengthened economic activity, and a reduction in the size of the informal economy.

Legislative Developments and Market Regulation

In addition to the economic reforms, the government has proposed amendments to the Law on the Regulation of Agricultural Products Market. This legislation aims to align Montenegro with the European Union’s Common Agricultural Policy and is part of the obligations the country must fulfill to harmonize its legislation with EU law as outlined in the “Action Plan for Alignment with EU Acquis.”

The amendments will lay a strong foundation for the adoption of subordinate legislation that will ensure full implementation of the law in line with EU member states’ regulations. The government highlighted that these changes would facilitate better application of the law within Montenegro’s legal system, paving the way for its future EU membership.

The government has also approved a proposal for a law concerning cross-border energy infrastructure projects, which will regulate procedures, conditions, and methods for executing significant cross-border energy projects. Montenegro, as a member of the Energy Community and a candidate for EU membership, is obligated to align its legislation with EU regulations in the energy sector.

The new law is expected to create favorable conditions for timely and successful implementation of cross-border energy infrastructure projects, attracting investments, accelerating economic development, and achieving environmental protection goals.

Furthermore, the government has introduced a proposal for a law on free zones, aiming to establish a modern and operational regulatory framework for the creation and management of free zones in Montenegro. This includes enhancing transparency and customs oversight of commodity flows by implementing mandatory technical and information measures.

The proposed Consumer Protection Law is another significant development, aimed at aligning the legal framework with the latest EU consumer protection directives from 2019. This law is critical for temporarily closing Chapter 28 in negotiations with the European Commission.

Lastly, amendments to the Arbitration Law have been proposed to better position Montenegro as a candidate for EU membership. The changes will enhance the recognition of arbitration as a vital mechanism for dispute resolution, particularly for foreign investors, and are expected to improve the business environment and legal security for investments.

Through these initiatives, the Montenegro government is taking decisive steps toward economic reform and legislative alignment with EU standards, which are essential for its future integration into the European Union.