In Kosovo we focus on:
Strengthening private sector performance in the country: The Bank will continue pursuing its traditional forte of helping to deliver on the country’s connectivity agenda with enhanced focus on project implementation, and step up its support for municipalities and enlisting them to carry out climate-resilient and greener infrastructure investments. The Bank will pay particular attention to accelerating the implementation of public sector investments and supporting the delivery under the EU’s Economic and Investment Plan.
Navigating the repercussions of the COVID19 pandemic through stepped up response measures, including for publicly-owned enterprises and municipalities as well as the financial sector as the backbone for economic activity. Throughout, regional integration will remain the lodestar to guide the Bank’s investment and policy activities, and special emphasis will be placed on exploring synergies with the Bank’s activities in neighbouring economies.
The EBRD’s latest Kosovo strategy was adopted on 26 January 2022.
EBRD forecast for Kosovo real GDP Growth in 2022 4.0%
EBRD forecast for Kosovo real GDP Growth in 2023 4.0%
The economy rebounded rapidly in 2021, growing by 10.5 per cent according to preliminary estimates, on the back of renewed post-Covid mobility and strong support from the diaspora. Household consumption was upheld by high inflows of remittances and significant credit growth. Inflows from exports of services nearly doubled compared with 2020 on the back of diaspora visits, surpassing the 2019 level. While still modest compared to services, goods exports receipts increased by 58 per cent in 2021 in nominal terms and nearly doubled compared with the 2019 value.
GDP growth is expected to slow down significantly in 2022. The first two months of the year were characterised by the continuation of robust annual credit growth of 16 per cent and remittances (30 per cent above the pre-pandemic level), which bodes well for consumption. But this is balanced against strong inflationary pressures, which are affecting disposable incomes. The energy crisis and rising food prices have been exacerbated by the economic impact of the war on Ukraine, and inflation surged to 10 per cent year-on-year in March 2022. This resulted in increased spending on electricity imports and social measures to support the economy, weighing on the fiscal accounts. The economy is forecast to grow by 4.0 per cent in both 2022 and 2023. The main risks to the outlook are rising uncertainties, growing commodity prices and potential weaknesses in the external sector.