Economic Monitor Kosovo
Kosovo’s economy grew by 3.3% in 2023, driven by public spending and private consumption, and is expected to stabilize at around 4% in coming years. Inflation, which peaked at 11.6% in 2022, declined to 5% in 2023 and is expected to continue declining in 2024. Despite increased imports due to strong public spending and high FDI-inflows, the current account deficit narrowed to 7.9% of GDP. The budget deficit remained unchanged at 0.8% of GDP in 2023, despite increased public spending.
WA 06 | March 2024
Macroeconomic Analyses and Forecasting
Overview
- 2023: economic growth at 3.3%, driven by public investment and private/public consumption
- Stabilisation of economic growth at around 4% predicted for 2024 and onwards
- Disinflation: after a surge in inflation (2022: 11.6%) due to high global commodity prices, inflation is estimated at 5% in 2023 and is expected to further decrease in 2024
- Strong public investment and FDI contributed to higher imports of goods in 2023; nevertheless, current account deficit decreased to 7.9% of GDP
- Robust service exports and remittances counteract effects of high imports of goods
- Budget deficit remained stable at 0.8% of GDP in 2023 despite resumed public investment activities; positive feature
Special issues
- FDI. Inflows at a record high (9% of GDP) and more diversified than in the last two years
- Green Card. Lacking membership in the Green Card system is associated with negative economic implications for Kosovo’s transport sector and tourism
- Energy and climate policy. New Energy Strategy and Draft National Energy and Climate Plan outline great ambitions in the energy and climate policy space
