Kosovo

The Iran conflict is expected to significantly affect Kosovo’s economy in 2026 by driving up oil prices, increasing import costs by 1.1% of GDP, slowing growth to 3.3%, and raising inflation to 5.9%—the largest forecast revisions in the region. Despite these shocks, growth will continue to be supported by strong private consumption, while remittances and FDI are expected to remain resilient. The current account deficit and budget deficit are projected to widen, although these changes are driven mainly by strong domestic demand and higher social spending rather than the conflict itself.