Cityscape in Kosovo

Kosovo Economic Forecast

Kosovo Economic Outlook

Annual GDP growth decelerated to 2.0% in Q2 from 3.9% in Q1. The decline was solely driven by weaker export growth, as both merchandise exports and foreign tourist arrivals softened in the period. Domestic demand strengthened across the board, with imports, investment, and private and public spending gaining traction. Available data for Q3 suggests that the economy weakened further. In July–August, merchandise exports contracted at a sharper annual rate relative to Q2’s average. Moreover, remittance inflows lost steam in the same two-month period. In other news, on 24 September, an ethnic Serbian paramilitary group in Kosovo—with links to Belgrade, according to Kosovar authorities—stormed a village in the north of the country, causing four deaths. This bodes poorly for conflict resolution with Serbia and threatens peace and stability in the area.

Kosovo Inflation

Inflation came in at 3.2% in August, up from 2.4% in July. Inflation is seen averaging lower this year compared to last, curbed by lower commodity prices, a strong base effect and cooling private demand. A weaker-than-expected euro and commodity price spikes pose upside risks.

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
Exchange Rate (USD per EUR, eop) 1.14 1.12 1.22 1.14 1.07
Exchange Rate (USD per EUR, aop) 1.18 1.12 1.14 1.18 1.05
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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