Kosovo Economic Forecast

Kosovo Economic Outlook

June 7, 2022

The pace of economic growth should have moderated in the first quarter of the year amid effects of the Russian invasion of Ukraine. Inflation intensified and breached double digits in March. This, coupled with a contraction in remittances and a notable moderation in consumer loans growth, will have dented household spending. More positively, a strong rebound in merchandise export growth narrowed the goods trade deficit. Turning to Q2, price pressures continued to build in April amid pricier energy and food commodities. This, together with a marked contraction in consumer loans, bodes poorly for private consumption. However, robust remittance inflows should partly negate these dynamics. Meanwhile, the government is revising its budget to provide aid to poor households hit by inflation. And the EBRD is considering a EUR 22.5 million loan for the construction of a solar thermal plant.

Kosovo Economic Growth

Economic growth will be impeded this year by the fallout from the war in Ukraine as well as a tougher base of comparison. The war on Europe’s eastern flank has stoked energy and food prices, eroding households’ purchasing power. Increased general economic uncertainty will likely weigh on investment. A potential flare-up in tensions with Serbia further clouds the outlook. FocusEconomics panelists see the economy expanding 3.5% in 2022, which is down 0.2 percentage points from last month’s forecast, and 3.8% in 2023.

Kosovo Economy Data

2015 2016 2017 2018 2019
Population (million)1.81.81.81.81.8
GDP per capita (USD)3,5773,6983,9594,3054,293
GDP per capita (EUR)3,2233,3423,5043,6453,835
GDP (USD bn)6.46.77.27.97.9
GDP (EUR bn)5.86.16.46.77.1
Economic Growth (GDP, annual variation in %)4.14.14.23.84.2
Unemployment Rate-  -  -  -  -  
Fiscal Balance (% of GDP)-1.6-1.1-1.1-2.6-2.6
Public Debt (% of GDP)13.114.416.216.917.5
Inflation Rate (CPI, annual variation in %)-0.50.31.51.12.7
Current Account (% of GDP)-8.5-7.9-5.2-7.6-  
Current Account Balance (EUR bn)-0.5-0.5-0.3-0.5-0.4
Trade Balance (EUR billion)-2.1-2.3-2.5-2.7-2.8
Exports (EUR billion)0.30.30.40.40.4
Imports (USD billion)2.93.13.53.94.0
Imports (EUR billion)2.42.62.83.13.2
Exports (annual variation in %)-0.6-4.522.9-0.44.4
Imports (annual variation in %)2.16.99.49.63.8
International Reserves (EUR)0.70.60.70.80.9

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Kosovo Facts

Value Change Date
Bond Yield4.740.0 %Nov 30
Exchange Rate1.120.65 %Dec 31
Stock Market0.10.0 %Jan 07

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