Kosovo Economic Forecast

Kosovo Economic Outlook

July 3, 2018

Economic activity gained steam in Q1 on the back of stronger growth in the construction sector and a rebound in electricity, gas and water supply. Private consumption growth accelerated in Q1 mainly due to loose financial conditions, a declining unemployment rate and positive remittance inflows. Remittances growth, however, halved in Q1 compared to the previous quarter, and if this trend continued in Q2, it could have undermined household consumption in the period. Gross capital formation expanded at a double-digit rate in Q1 on solid infrastructure spending. Meanwhile, the trade deficit widened in the first five months of the year due to a lackluster performance in shipments of mineral products and higher global commodity prices.

Kosovo Economic Growth

Economic growth is expected to pick up slightly this year on the back of solid investment, mostly in public infrastructure, and stronger household consumption. However, despite declining, Kosovo’s high unemployment rate will continue to limit potential growth. FocusEconomics panelists see GDP increasing 4.1% in 2018, which is unchanged from last month’s estimate. For 2019, our panel sees growth of 4.2%.

Kosovo Economy Data

20132014201520162017
Population (million)1.81.81.81.81.8
GDP per capita (USD)3,8084,2053,6003,7243,932
GDP per capita (EUR)2,9303,0713,2313,3523,479
GDP (USD bn)6.97.66.56.77.1
GDP (EUR bn)5.35.65.86.16.3
Economic Growth (GDP, annual variation in %)3.41.24.14.13.7
Unemployment Rate30.035.332.927.530.5
Fiscal Balance (% of GDP)-3.1-2.4-1.8-1.2-  
Public Debt (% of GDP)8.910.512.914.015.9
Inflation Rate (CPI, annual variation in %)1.80.4-0.50.31.5
Current Account (% of GDP)-6.5-7.4-9.0-  -  
Current Account Balance (EUR bn)-0.2-0.4-0.5-0.5-0.4
Trade Balance (EUR billion)-2.0-2.1-2.1-2.3-2.7
Exports (EUR billion)0.30.30.30.30.4
Imports (USD billion)3.23.52.93.13.5
Imports (EUR billion)2.32.42.42.62.8
Exports (annual variation in %)3.411.3-0.6-4.522.8
Imports (annual variation in %)-1.94.22.16.917.3
International Reserves (EUR)0.70.60.70.70.9

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Kosovo Facts

ValueChangeDate
Bond Yield4.910.0 %May 31
Exchange Rate1.170.65 %Jul 17
Stock Market0.10.0 %Jul 17

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