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) | 1.8 | 1.8 | 1.8 | 1.8 | 1.8 |
| GDP per capita (USD) | 3,577 | 3,698 | 3,959 | 4,305 | 4,293 |
| GDP per capita (EUR) | 3,223 | 3,342 | 3,504 | 3,645 | 3,835 |
| GDP (USD bn) | 6.4 | 6.7 | 7.2 | 7.9 | 7.9 |
| GDP (EUR bn) | 5.8 | 6.1 | 6.4 | 6.7 | 7.1 |
| Economic Growth (GDP, annual variation in %) | 4.1 | 4.1 | 4.2 | 3.8 | 4.2 |
| Unemployment Rate | - | - | - | - | - |
| Fiscal Balance (% of GDP) | -1.6 | -1.1 | -1.1 | -2.6 | -2.6 |
| Public Debt (% of GDP) | 13.1 | 14.4 | 16.2 | 16.9 | 17.5 |
| Inflation Rate (CPI, annual variation in %) | -0.5 | 0.3 | 1.5 | 1.1 | 2.7 |
| 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) | 0.3 | 0.3 | 0.4 | 0.4 | 0.4 |
| Imports (USD billion) | 2.9 | 3.1 | 3.5 | 3.9 | 4.0 |
| Imports (EUR billion) | 2.4 | 2.6 | 2.8 | 3.1 | 3.2 |
| Exports (annual variation in %) | -0.6 | -4.5 | 22.9 | -0.4 | 4.4 |
| Imports (annual variation in %) | 2.1 | 6.9 | 9.4 | 9.6 | 3.8 |
| International Reserves (EUR) | 0.7 | 0.6 | 0.7 | 0.8 | 0.9 |
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Kosovo Facts
| Value | Change | Date | |
|---|---|---|---|
| Bond Yield | 4.74 | 0.0 % | Nov 30 |
| Exchange Rate | 1.12 | 0.65 % | Dec 31 |
| Stock Market | 0.1 | 0.0 % | Jan 07 |
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