Cityscape in Kosovo

Kosovo Economic Forecast

Kosovo Economic Outlook

Annual economic growth accelerated in Q1, chiefly on the back of a rebound in gross capital formation. In Q2, activity should have remained healthy. Available data suggests that domestic demand strengthened: Merchandise imports and remittances expanded at a faster pace relative to Q1, while inflation declined throughout the quarter. On the flip side, foreign tourist arrivals expanded at a softer rate and merchandise exports swung to contraction in Q2, while FDI inflows shrank in April–May. Meanwhile, in mid-August, the IMF stated that Western sanctions imposed in late June due to tensions in the north of the country could lead to a reduction in FDI, denting growth prospects. Notably, several EU-funded infrastructure projects have been canceled in recent weeks.

Kosovo Inflation

Inflation fell to 2.4% in July from June’s 2.8%, marking an over-two-year low. Inflation is set to average lower this year relative to 2022, curbed by lower commodity prices, cooling private demand and a strong base effect. Commodity prices and the strength of the euro are factors to watch.

This chart displays Economic Growth (GDP, annual variation in %) for Kosovo from 2013 to 2022.

Kosovo Economic Data

2018 2019 2020 2021 2022
Population (million) 1.8 1.8 1.8 1.8 1.8
GDP (USD bn) 7.9 7.9 7.7 9.4 9.4
GDP per capita (USD) 4,380 4,415 4,312 5,267 5,342
GDP (EUR bn) 6.7 7.1 6.8 8.0 9.0
GDP per capita (EUR) 3,712 3,944 3,783 4,456 5,082
Economic Growth (Nominal GDP, ann. var. %) 5.0 5.8 -4.0 17.5 12.5
Economic Growth (GDP, ann. var. %) 3.4 4.8 -5.3 10.7 3.5
Unemployment (% of active population, aop) 29.5 25.7 26.0 20.8 -
Fiscal Balance (% of GDP) -2.6 -2.7 -7.6 -0.9 -
Public Debt (% of GDP) 17.0 17.6 22.4 21.5 20.7
Inflation (HICP, ann. var. %, aop) 1.1 2.7 0.2 3.3 11.6
Current Account Balance (EUR bn) -0.5 -0.4 -0.5 -0.7 -0.9
Current Account Balance (% of GDP) -7.6 -5.7 -7.0 -8.7 -10.2
Merchandise Trade Balance (EUR bn) -2.7 -2.8 -2.6 -3.6 -4.3
Merchandise Exports (EUR bn) 0.4 0.4 0.5 0.8 0.9
Merchandise Imports (EUR bn) 3.1 3.2 3.0 4.3 5.2
Merchandise Exports (ann. var. %) -0.4 4.4 20.8 58.4 23.8
Merchandise Imports (ann. var. %) 9.6 3.8 -5.7 41.7 20.8
Foreign Direct Investment (EUR bn) 0.3 0.3 0.3 0.4 0.7
International Reserves (EUR bn) 0.7 0.9 1.0 1.1 1.2
International Reserves (months of imports) 2.9 3.2 3.8 2.9 2.7
External Debt (EUR bn) 2.0 2.2 2.5 3.0 3.4
External Debt (% of GDP) 30.3 31.0 37.0 37.1 38.4

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