Kosovo

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In 2023, domestic demand was the main driver of the economy, which grew by 3.2%. External demand was moderate and will remain weak in 2024. Consumer price inflation stood at 4.9% in 2023 and is expected to drop further to 3.2% this year, as inflationary pressure in the EU recedes. Foreign direct investment remained solid and expanded further by 7% in the period January-October 2023, year on year, though there was a shift in the country’s main partners: there was a marked surge in investment from Austria, Turkey and Slovenia. Those sectors that absorbed most of this investment were energy and financial and insurance activities. The signals from the labour market appear positive: employment grew by 3.5% up to October 2023, year on year. Most of the jobs were generated in the public sector and went to people in the age group 25-34. As of January 2024, citizens of Kosovo can finally travel without a visa in the Schengen area. We expect youth emigration to accelerate, as the unemployment rate for this group rose to 20% in 2022. Another positive development marked the start of 2024: Serbia and Kosovo agreed to recognise each other’s car number plates, finally ending a dispute that had rumbled on for years. The government is pursuing an expansionary fiscal policy targeting the most vulnerable groups. Public investment will continue to rise. Accordingly, the budget deficit is expected to reach 1.5% in 2024. In the medium term, we anticipate that economic growth will accelerate to above 3.5%, again supported by domestic demand.
        FORECAST*
Main Economic Indicators202120222023202420252026
Population, 1000 persons178617681775...
GDP, real change in %10.74.33.33.53.73.6
GDP per capita (EUR at PPP)8690984010310...
Gross industrial production, real change in %0.30.22.5...
Unemployment rate - LFS, in %, average20.712.512.411.311.110.9
Average gross monthly wages, EUR484521610...
Consumer prices, % p.a.3.411.64.94.02.52.5
Fiscal balance in % of GDP-1.3-0.5-0.3-1.4-2.0-1.5
Public debt in % of GDP21.119.717.2...
Current account in % of GDP-8.7-10.3-7.6-7.9-7.6-7.0
FDI inflow, EUR m421732844...
Gross external debt in % of GDP37.138.639.9...


Basic data are continuously updated.

* Forecasts are changed beginning of January, April, July and November.
See Press Conferences.

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Monthly Report No. 1/2024

Vasily Astrov, Alexandra Bykova, Rumen Dobrinsky, Selena Duraković, Meryem Gökten, Richard Grieveson, Doris Hanzl-Weiss, Gabor Hunya, Branimir Jovanović, Niko Korpar, Sebastian Leitner, Isilda Mara, Olga Pindyuk, Sandor Richter, Marko Sošić, Bernd Christoph Ströhm, Maryna Tverdostup and Adam Żurawski
wiiw Monthly Report No. 1, January 2024
50 pages including 5 Tables and 18 Figures

Details

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Executive summary

Branimir Jovanović
in: Beneath the Veneer of Calm
wiiw Forecast Report No. Autumn 2023, October 2023 , pp. I-VI
Details


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