The average salary in Montenegro hit 821 euros after tax in February, a growth of almost 300 euros since the Democratic Party of Socialists, DPS, left power in 2020 for the first time in three decades. But while Montenegrins are now among the highest earners in the Balkans, economists say the growth is out of proportion with the country’s real economic progress and risks fuelling inflation even further.

The growth can be attributed to an economic programme put in place in January 2022 by the co-ruling Europe Now movement, which abolished the mandatory health insurance contributions paid by employers and set a minimum wage of 450 euros in both the private and public sectors. Doctors and university professors have also seen their salaries go up.

But while the programme might win votes, economists have warned repeatedly that there is no real economic basis for such a rapid rise in public sector pay and it may not be sustainable in the long term. The risk is that it will further fuel inflation in a country that is already heavily dependent on imports.