Montenegro Made a Major Step in the Fight Against the Gray Economy: Informal Economy Dropped from 20.6% to 12.4% of GDP

The most noticeable change was achieved in the area of formal employment, which for the Ministry of Finance represents one of the most important effects of the implemented policies, as more employees in the formal system mean greater worker security, better protection of their rights, and a stronger foundation for sustainable economic growth. The achieved result shows that suppressing the gray economy yields results when carried out through continuous and interconnected measures, from tax discipline and supervision, through formalization of work, to digitalization and cashless payments. In the past year, the sectors with the most significant improvements were transportation and agriculture, with regional variations showing the highest value in the north at 17.5%, and the lowest in the central region at 11.3%, which also experienced the greatest reduction compared to 2022. Priorities will include further reducing opportunities for informal business, strengthening tax discipline, protecting employees, digitalization and cashless payments, increased inspection oversight, and creating equal conditions for all market participants. By the end of this year, the formal economy is expected to reach nearly 80%, with the involvement of all relevant institutions and stakeholders, in accordance with the European Commission's requirements and obligations from the Reform Agenda. Although a significant step has been taken toward a more formal economy, the goal remains the same: formal business must be the rule, rules must be equal for everyone, and responsible business practices must become the standard of the Montenegrin economy.