Kosovo Economic Forecast

Kosovo Economic Outlook

May 12, 2020

Although economic data for January–February paints a fairly positive picture, with strong growth in remittances and consumer loans likely supporting household spending, restrictive measures in March to curtail the spread of Covid-19 dealt a heavy blow to the economy: Consumer loans and remittances plunged in the month. Moreover, worse will come in the second quarter as the government announced additional social distancing measures in mid-April, while the European lockdown will be weighing heavily on trade, remittances and tourism. The fight against the economic fallout from the health crisis is complicated by political turmoil: The government lost a no-confidence vote in late March, and the country’s constitutional court has suspended until 29 May a presidential decree nominating the Democratic League of Kosovo to form a new government. The suspension came after members of the caretaker government filed a motion with the court.

Kosovo Economic Growth

The economy is expected to shrink this year as the Covid-19 pandemic weighs heavily on domestic demand, tourist arrivals, exports and remittances. Moreover, the unstable political situation could reduce the speed and effectiveness of the policy response to combat the economic fallout of the health crisis. However, the fiscal measures to date should ease the blow somewhat. FocusEconomics panelists forecast a contraction of 4.3% in 2020, which is down 6.7 percentage points from last month’s projection. Our panelists see the economy growing 5.6% in 2021.

Kosovo Economy Data

2014 2015 2016 2017 2018
Population (million)1.81.81.81.81.8
GDP per capita (USD)4,1843,5913,7133,9964,256
GDP per capita (EUR)3,0563,2233,3423,5043,645
GDP (USD bn)7.66.56.77.37.9
GDP (EUR bn)5.65.86.16.46.7
Economic Growth (GDP, annual variation in %)1.24.14.14.23.8
Unemployment Rate-  -  -  -  -  
Fiscal Balance (% of GDP)-2.3-1.6-1.1-1.1-2.6
Public Debt (% of GDP)10.713.114.416.217.1
Inflation Rate (CPI, annual variation in %)0.4-0.50.31.51.1
Current Account (% of GDP)-6.6-8.5-7.9-5.2-7.6
Current Account Balance (EUR bn)-0.4-0.5-0.5-0.3-0.5
Trade Balance (EUR billion)-2.1-2.1-2.3-2.5-2.7
Exports (EUR billion)0.30.30.30.40.4
Imports (USD billion)3.52.93.13.53.9
Imports (EUR billion)2.42.42.62.83.1
Exports (annual variation in %)11.3-0.6-4.522.9-0.4
Imports (annual variation in %)4.22.16.99.49.6
International Reserves (EUR)0.60.70.60.70.8

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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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