Kosovo

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The economy bounced back in Q1 2021, growing by 5.6% year on year on the back of strong domestic and external demand. Consumption and investment grew year on year by 7.4% and 14.9%, respectively. Remittances soared by 30% in the first three months and the labour market is also recovering. Foreign direct investment from Germany, Austria and Switzerland has surged in remarkable fashion, suggesting that Kosovo may already be capitalising on near-shoring by EU companies. The trade balance is also starting to benefit from a steep rise in goods exports, which grew by 62% year on year in January to May 2021.

A very promising fiscal performance in the first five months of the year has created ample scope for further necessary public spending in support of businesses and families that have been hard hit by the pandemic. Though a further rise in public debt is unavoidable, it will not be too enormous. Inflation has been picking up, reaching 2% in the first five months; but it will remain at a tolerable level, averaging 1.5% for the year. The banking sector is stable and well capitalised. Thus, we have upgraded our growth projection for 2021 slightly – from 4.8% to 5.3%. The slow progress of vaccination and the new variants of the virus are the main sources of uncertainty.
        FORECAST*
Main Economic Indicators201820192020202120222023
Population, 1000 persons179717891790...
GDP, real change in %3.44.8-3.05.34.74.4
GDP per capita (EUR at PPP)751079707860...
Gross industrial production, real change in %-1.36.30.8...
Unemployment rate - LFS, in %, average29.625.725.926.025.024.5
Average gross monthly wages, EUR453477466...
Consumer prices, % p.a.1.12.70.21.51.72.0
Fiscal balance in % of GDP-2.9-2.9-7.5-1.0-0.51.0
Public debt in % of GDP16.417.021.7...
Current account in % of GDP-7.6-5.7-7.0-6.5-6.2-5.7
FDI inflow, EUR m272255342...
Gross external debt in % of GDP30.531.237.0...


Basic data are continuously updated.

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

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Monthly Report No. 7-8/2021

Vasily Astrov, Alexandra Bykova, Rumen Dobrinsky, Selena Duraković, Richard Grieveson, Doris Hanzl-Weiss, Gabor Hunya, Branimir Jovanovic, Niko Korpar, Sebastian Leitner, Isilda Mara, Olga Pindyuk, Leon Podkaminer, Sandor Richter, Bernd Christoph Ströhm and Maryna Tverdostup
wiiw Monthly Report No. 7-8, July-August 2021
42 pages including 4 Tables and 15 Figures

Details

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KOSOVO: Major future challenges and high expectations of new government

Isilda Mara
in: Darkest before the dawn?
wiiw Forecast Report No. Spring 2021, April 2021 , pp. 82-85
Details and Buy


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