Cityscape in Kosovo

Kosovo Economic Forecast

Kosovo Economic Outlook

After slowing in Q2 last year, annual GDP growth accelerated in Q3 due to stronger private and public spending and a weaker contraction in investment, which more than offset slower export growth. Turning to Q4, growth likely deteriorated. Consumer loans plunged into an annual contraction during the quarter. Moreover, electricity consumption continued to contract in the same period. Furthermore, remittances growth slowed and inflation remained in double digits in the quarter, boding poorly for private consumption. In politics, under EU supervision, Kosovo and Serbia tentatively agreed to normalize relations in late February. This generated protests in Belgrade; Kosovo is considered by some as central to the Serb nation as it houses the Serbian Orthodox faith’s main churches. That said, a final deal is yet to be signed. Further talks on its implementation are scheduled for 18 March.

Kosovo Inflation

In January, harmonized inflation remained stable at December’s 12.1%. Inflation should more than halve this year and fall into single-digit territory on moderating commodity prices and a stronger base effect.

Kosovo Economic Data

2017 2018 2019 2020 2021
Population (million) 1.8 1.8 1.8 1.8 1.8
GDP (USD bn) 7 8 8 8 9
GDP per capita (USD) 4 4 4 4 5
GDP (EUR bn) 6 7 7 7 8
GDP per capita (EUR) 3 3 3 3 4
Economic Growth (Nominal GDP, ann. var. %) 5.3 5.0 5.8 -4.0 17.5
Economic Growth (GDP, ann. var. %) 4.8 3.4 4.8 -5.3 10.5
Unemployment (% of active population, aop) 30.5 29.5 25.7 26.0 20.8
Fiscal Balance (% of GDP) -1.1 -2.6 -2.6 -7.1 -0.9
Public Debt (% of GDP) 16.4 17.0 17.6 22.4 21.9
Inflation (HICP, ann. var. %, aop) 1.5 1.1 2.7 0.2 3.3
Current Account Balance (EUR bn) -0.3 -0.5 -0.4 -0.5 -0.7
Current Account Balance (% of GDP) -5.5 -7.6 -5.7 -7.0 -8.7
Merchandise Trade Balance (EUR bn) -2.5 -2.7 -2.8 -2.6 -3.6
Merchandise Exports (EUR bn) 0.4 0.4 0.4 0.5 0.8
Merchandise Imports (EUR bn) 2.8 3.1 3.2 3.0 4.3
Merchandise Exports (ann. var. %) 22.9 -0.4 4.4 20.8 58.4
Merchandise Imports (ann. var. %) 9.4 9.6 3.8 -5.7 41.7
Foreign Direct Investment (EUR bn) 0 0 0 0 0
International Reserves (EUR bn) 0.7 0.8 0.9 0.9 1.1
International Reserves (months of imports) 2.9 3.0 3.2 3.5 3.0
External Debt (EUR bn) 2.1 2.0 2.2 2.5 3.0
External Debt (% of GDP) 32.9 30.5 31.2 37.2 37.4

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