Budget revenues in the first three months of 2025 were €13 million below projections, a concerning trend according to economic analyst Predrag Zečević, who attributes the shortfall to a lack of foreign direct investment.
The Ministry of Finance’s report, published at the end of April, shows that revenues from January to March were slightly (less than 1%) higher compared to the same period last year. However, they still fell short of the planned amount by €13 million.
While VAT revenues increased compared to the previous year, as expected, Zečević considers the 2–3% shortfall from the plan to indicate a moderate pace of tax collection.
He points out a positive sign: VAT revenues rose by 12%, and income tax revenues from individuals increased by over 35%.
“This clearly reflects resilient personal consumption and a formalization of the labor market, driven by the ‘Europe Now 1 and 2’ programs,” Zečević stated. “On the other hand, the slight decline in corporate income tax revenue is due to a delayed filing deadline and should be viewed as a temporary issue rather than a structural one.”
The Finance Ministry also reported a significant drop in social contribution revenues, both compared to last year and against this year’s projections.
Social contributions amounted to €84.4 million in the first quarter, down €30.4 million or 26.5% compared to the same period in 2024, and €7.7 million or 8.3% below the planned figure.
Zečević called this decline worrisome: “This drop requires a deeper analysis of fiscal policy impacts. It’s clear we’re facing lower revenues. While not yet alarming, the situation points to a serious lack of much-needed foreign investment.”
Without new investment, Zečević warns, Montenegro could face structural economic problems.
“Personal consumption will stagnate, budget revenues will continue to fall, and this will eventually lead to a gradual decline in wages,” he cautioned.
Despite the revenue shortfall, the Ministry of Finance notes that the overall budget deficit for the first quarter stands at €63.9 million—better than the projected €120 million shortfall.
