Kosovo overview

In Kosovo we focus on:

Supporting competitive development of the private sector: The EBRD will provide financing to Kosovo corporates and small and medium-sized enterprises (SMEs) to support investment in competitiveness gains. Improving access to finance for SMEs will remain a priority, and the Bank will continue to work with local partner banks to this end. The Bank will continue deploying targeted frameworks, such as the Women in Business programme and the Western Balkans Sustainable Energy Financing Facility, and will also provide business advisory services.

Enhancing energy security and sustainability: The Bank will seek to apply its Green Economy Transition approach to all investments in the country. Energy efficiency and renewable energy can help mitigate power shortfalls, which are currently endemic, while enhancing environmental sustainability. The Bank will also consider supporting investments in power generation capacity where these are consistent with its Energy Sector Strategy.

Supporting connectivity and regional integration: Infrastructure development is needed to improve Kosovo’s regional integration and attract foreign direct investment, as well as to harmonise with EU standards. To that end, Kosovo needs to develop road links to pan-European corridors and modernise its railway network. The EBRD will aim to provide long-term finance and advisory to help build and rehabilitate key transport links, as well as support Kosovo in bringing its transport sector into compliance with European standards.

The EBRD’s latest Kosovo strategy was adopted on 4 October 2016.

EBRD forecast for Kosovo real GDP Growth in 2017 3.5%

EBRD forecast for Kosovo real GDP Growth in 2018 3.5%

Kosovo’s economy continued to perform well in 2016, although the rate of growth slowed down slightly from 4 per cent in 2015 to 3.4 per cent in 2016. The drivers of growth in Kosovo continue to be robust private consumption, helped by major inflows of remittances, and strong investment figures, including public investments in infrastructure. On the other hand, government consumption and net exports made negative contributions to growth with the latter reflecting the country’s weak production base and low competitiveness.

Public debt remains low by regional standards, at around 15 per cent of GDP, and fiscal discipline has been maintained within the framework of the 22-month IMF Standby Arrangement (signed in July 2015), which in March 2017 was extended by several months to August 2017. We maintain our forecast of 3.5 per cent growth for 2017 and the same figure for 2018, as growth is expected to be supported by further remittance inflows, which should continue to fuel private consumption and investment, as well as by critical public investment in transport and energy infrastructure.

Kosovo in the EBRD’s 2016-17 Transition Report