Economy of Kosovo

Economy of Kosovo

Kosovan capital and largest city Pristina
Currency	Euro (EUR)
Fiscal year	Calendar year
Trade organisations	CEFTA
Country group	Developing/Emerging Economy Upper-middle income economy[1]
Statistics
Population	1,586,659 (2024)[2]
GDP	$11.3 billion (nominal, 2024 est.)[3] $29.7 billion (PPP, 2024 est.)[3]
GDP rank	— 155 (nominal, 2022) — 151 (PPP, 2022)
GDP growth	3.8% (2024 est.)[3]
GDP per capita	$7,122 (nominal, 2024 est.)[3] $18,718 (PPP, 2024 est.)[3]
GDP per capita rank	— 132 (nominal, 2022) — 102 (PPP, 2022)
GDP by sector	agriculture: 11.9% industry: 17.7% services: 70.4% (2017)[4]
Inflation (CPI)	10.5% (2023)[5]
Population below poverty line	17.6% (2015)[6] 34% on less than $6.85/day (2017)[7]
Gini coefficient	29.0 low (2017)[8]
Human Development Index	0.762 high (2021)[9] (N/A) N/A IHDI (2017)
Corruption Perceptions Index	41 out of 100 points (2023, 83rd rank)
Labour force	483,465 (2023)[10]
Labour force by occupation	agriculture: 4.4% industry: 17.4% services: 78.2% (2017)[4]
Unemployment	10.7% (2023)[10]
Average gross salary	521€/$566 monthly (2022)[10]
Average net salary	446€/$485 monthly (2022)[10]
Final consumption expenditure	97.5% of GDP (2022)[11]
Gross capital formation	35% of GDP (2022)[12]
Gross savings	24.7% of GDP (2022)[3]
Main industries	mineral mining, construction materials, base metals, leather, machinery, appliances, foodstuffs & beverages, textiles[4]
External
Exports	$939 million (2023)[13]
Export goods	Mining & processed metal products, mineral products, food and beverages, products of plastic and rubber, agricultural products, leather products, textile, machinery and electrical components.
Main export partners	EU 32.3%  North Macedonia 14.1%  Albania 13.3%  United States 12.3%   Switzerland 8.8% (2023)
Imports	$6.4 billion (2023)[13]
Import goods	Mineral products, food and beverages, machinery and electrical components, vehicles, chemical products, products of plastic and rubber, agricultural products, textile, live animals
Main import partners	EU 43%  Turkey 14.8%  China 11%  Albania 5.5%  North Macedonia 5.3% (2023)
FDI stock	Inward: $6.8 billion (2023)[14]
Current account	−$991 million (2022)[3] −1.86% of GDP (2022)[3]
Gross external debt	$3.7 billion (2022)[15]
Public finances
Government debt	$1.94 billion 20.13% of GDP (2022)[3]
Revenues	$3,111 billion (2023)[16] 29.7% of GDP (2023)
Expenses	$3,182 billion (2023)[16] 30.4% of GDP (2023)
Credit rating	Fitch:[17] BB- Outlook: Stable
Foreign reserves	$1.04 billion [15]
All values, unless otherwise stated, are in US dollars.

Kosovo is a developing country with an economy that functions on the principles of the free market, with a large private sector. Kosovo is an upper-middle income economy according to the World Bank,^[18] and is a member of the World Bank and the International Monetary Fund. Its official currency is the euro.

Kosovo has seen consistent economic growth since the end of the Kosovo War in 1999, with a positive growth rate in every year except 2020, during the COVID-19 pandemic.^[19] Its main trading partner is the European Union, with roughly 40% Kosovo's 2023 trade volume being done with the block, led by Germany, Italy and Greece. CEFTA countries make up another major part of Kosovo's trade partners, with North Macedonia, Albania, and Serbia being Kosovo's main regional trade partners. Other important trade partners include the United States, Turkey, Switzerland, and China.^[13]

Despite its high endowment with lignite, Kosovo is currently undergoing an energy transition, attempting to phase-out its aging lignite power plants and to replace them with wind power plants such as Bajgora and Kitka wind farms, and with solar parks.^[20] Kosovo's road network is relatively well developed, with the R6 and R7 motorways connecting the country to North Macedonia and Albania, respectively. The rail network is less developed, but investments are being made to modernize the train connections within the country.^[21]

Kosovo is home to many tech companies and is a net exporter of services, with service exports totalling $2.6 billion (28% of GDP) in 2022.^[22] The tourism sector is growing, with hiking and cultural tourism being main tourism activities. Peja, Prizren, and Pristina are some of the main tourist destinations, with Peja being close to the Accursed Mountains, a popular hiking destination.^[23]

One of the main economic weaknesses of Kosovo remains the dispute of its declaration of independence by its neighbor Serbia, as well as Russia and China, which makes it difficult for Kosovo to join international organizations such as the WTO. Another challenge is migration out of the country, with an estimated 700,000 citizens having left the country between 1990 and 2023. But there are also potential strengths, including its very low level of government debt, future liabilities, and the strength of its banking system (despite remaining obstacles to using this for productive loans).^[24] The emigrants are also an important part of the economy, with their visits and remitances playing an important role in building up capital for the future development of Kosovo's economy.