The Media Market

While still grappling with the aftermath of the pandemic, Montenegro faces renewed challenges. The growth in 2022 experienced a robust increase of 6.4%, and the International Monetary Fund (IMF) projects a further growth of 4.5% for Montenegro in 2023. Inflation has reached new highs, but its impact on the cost of living has been partially offset by a rise in real disposable incomes. From June 2019 to June 2023, inflation totaled 25%, reflecting the economic landscape.

Due to tax reforms and increased social spending, the fiscal deficit is expected to widen. The combination of high public debt and a challenging global environment calls for immediate fiscal consolidation. Montenegro, relying on unilateral euroization, looks to fiscal policy and structural reforms to maintain macroeconomic stability. However, fiscal vulnerabilities have increased due to debt-financed highway construction, the lingering effects of the pandemic, and a lack of commitment to fiscal targets.

In January 2022, Montenegro initiated a tax reform program aimed at reducing inequalities and fostering medium-term growth. The program entails the removal of healthcare contributions, the introduction of personal income tax allowances, progressive personal and corporate income taxation, and a net monthly minimum wage increase from €250 to €450. Despite the fiscal risks associated with the program, including a wider-than-planned fiscal deficit in 2022, the government remains committed to addressing economic disparities.

The unfavorable global economic outlook and high uncertainty cast a shadow over Montenegro's recovery prospects. The European Commission has revised its growth forecast for the Montenegrin economy, predicting a decline to 2.7% and 2.3% in the coming years.

A positive impact on the public budget comes from the temporary relocation of over 100,000 citizens of Ukrainian and Russian origin to Montenegro due to Russian aggression in Ukraine. This influx has led to increased public spending and higher budget income generation.

In the realm of media, legislative reforms implemented in 2020 have enhanced transparency in public finance for commercial media. Media and institutions are now obligated to regularly report any payments received from public funds. The Media Diversity and Pluralism Fund, supporting commercial media with approximately €900,000 per year, plays a crucial role in promoting media diversity.

Montenegrin commercial and local media have urged authorities to increase media funding to ensure pluralism. The government allocates at least €17 million to the National Public Broadcaster RTCG and almost a million to commercial media through the Media Diversity and Pluralism Fund. While municipalities provide funding for local public broadcasters, the uneven distribution has sparked concerns about the adequacy of state support.

Montenegrin media rely on advertising revenues, the sale of their own productions, and state financial assistance. The state funds media through the Media Diversity and Pluralism Fund or directly from the budget, especially for content related to education, culture, human rights, or minorities. However, the media market in Montenegro is small and vulnerable to larger regional markets that share the same languages. According to the 2019 Media Sustainability Index report, the total marketing budget in Montenegro is estimated to be around €11 million, with over 150 media outlets. Unfortunately, post-COVID-19 pandemic data on the media market's status are not available.

Commercial media argue that they cannot generate sufficient funds from the market alone to ensure pluralism without significant state support.