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 2023 3.5%
EBRD forecast for Kosovo real GDP Growth in 2024 4.0%
The economy expanded by 3.5 per cent in 2022, as external demand supported strong export growth, but domestic demand weakened on rising prices. A gradually deepening contraction of investment throughout the year was due to low public investment in infrastructure, reflecting bottlenecks in public management (which are now being addressed). The construction sector contracted reflecting lower investment.
Disposable incomes of the population will continue to be boosted by high remittances (totalling around 15 per cent of GDP), credit growth in double-digits in spite of higher borrowing costs, and a hike in public sector wages at the beginning of 2023. GDP growth is expected to remain similar in 2023, at 3.5 per cent, and to accelerate to 4 per cent in 2024. Downside risks to the outlook include stickier-than-expected inflation and slower-than-planned implementation of public investment projects. On the upside, renewed engagement with the IMF lends confidence to the medium-term outlook as the authorities have reached a staff-level agreement on two programmes: a two-year precautionary Stand-By Arrangement (SBA) which is expected to provide liquidity in case downside risks materialise, and a Resilience and Sustainability Facility (RSF) supporting Kosovo’s climate change mitigation and adaptation efforts.