Kosovo overview

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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.

Kosovo's policy response to the coronavirus crisis

The EBRD is monitoring Kosovo's policy response to the coronavirus pandemic. Our biweekly publication identifies the major channels of disruption as well as selected impact and response indicators.

Learn more

EBRD forecast for Kosovo real GDP Growth in 2020 -5.0%

EBRD forecast for Kosovo real GDP Growth in 2021 4.0%

With the onset of the pandemic, the GDP growth rate in Kosovo slowed to 1.3 per cent year-on-year in the first quarter of 2020, from 4.2 per cent in 2019. The slowdown came primarily on the back of falling investments (down 9 per cent year-on-year) and construction (down 12 per cent). Exports of services, which are mostly related to the country’s large diaspora and their visits to the country, recorded a decline of 35 per cent year-on-year in the first half of 2020. In contrast, goods exports performed surprisingly well, growing by 20 per cent year-on-year, primarily on the back of expanding exports of base metals and chemical products.
 
Similarly, remittances inflow stayed strong, up 10 per cent year-on-year in the first seven months of 2020. Annual inflation turned negative in July 2020, driven by the weak demand owing to the lockdown measures. The unemployment rate fell slightly in the first quarter of 2020, to 25 per cent, but may have increased since.
 
In April 2020, the government adopted an emergency relief package that supported employment,municipalities and people in need. In June, the new
government approved a medium term economic recovery package covering the period 2020-2023 and aiming to facilitate access to finance, reduce tax burden, support employment, agriculture as well as public enterprises. After a GDP contraction of 5.0 per cent in 2020 a rebound of 4.0 per cent is expected in 2021, with domestic demand continuing to be the main growth driver.
 
The risks to the projection are on the downside as the epidemic may intensify again. Further risks relate to the persistent weaknesses in the area of public investment management and the slower-than-anticipated recovery in key trading partners in the EU.
 

Kosovo in the EBRD’s 2020-21 Transition Report

 

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