Economic Monitor Issue 1 | September 2021


  • 2020: strong negative effect of COVID-19 on diaspora-linked tourism receipts and investment
  • But: negative shock was softened by strong fiscal support, higher remittances and CBK’s measures to support liquidity
  • As a result, GDP declined by 5.3% in 2020, a shorty reported by Agency of Statistics
  • 2021: GDP to increase by over 6%, driven by consumption, investment and net exports
  • Low inflation in 2020 on the back of low import prices (incl. energy); inflation to remain low in 2021
  • Slight real effective appreciation in 2020; however, a drop in wages helped to maintain the competitive edge for Kosovo
  • Significant increase in current account deficit in 2020 (7.5% of GDP), mainly due to low exports of services (esp. tourism receipts); reduction of deficit expected for 2021
  • Strong fiscal response to crisis led to increase in budget deficit to 7.7% of GDP in 2020; slight reduction in 2021 expected, major fiscal consolidation to take place in 2022

Newsletter Issue 1 | September – October 2021

Strong economic rebound in 2021

The economy of Kosovo was hit hard by COVID-19 in 2020. In particular tourism receipts, which accounted for 18% of GDP in 2019, dropped by more than half in 2020 on the back of travel restrictions. A strong fiscal response and higher remittances were able to reduce the effect of the shock. Nevertheless, GDP declined by 5.3% in 2020. For 2021, a strong rebound is expected with GDP growing by over 6%. The recovery is broadly based, but a very strong summer season for tourism was a decisive factor.