Kosovo’s economy is continuing its upswing.
For 2017, the Vienna Institute for International Economic Studies (WIIW) expects growth of 3.9%. The small country in the Western Balkans region is therefore likely to be among the fastest growing in Europe. Private consumption remains the main driver. Added to this is a robust investment propensity. Imports cover most of the demand for both consumer and capital goods.
Kosovo is a parliamentary republic. It declared its independence on 17 February 2008 and is recognized as an independent country by 114 of the 193 members of the United Nations and 23 of the 28 member states of the European Union (EU). Kosovo is a potential candidate for EU membership, a process that has been accelerated with the signing of the Stabilization Association Agreement in October 2015, which has been in force since April 2016. The current government was elected on September 9, 2017.
Although Kosovo’s economic growth has surpassed its neighbors and was largely inclusive, it was not enough to significantly reduce high unemployment rates. Provision of formal employment, especially for women and young people; or reverse the trend of large-scale emigration. The growth model relies heavily on remittances to boost domestic consumption, but has recently shifted to more investment and export-driven growth.
The current Kosovo Strategy for Growth and Poverty Reduction must address infrastructure bottlenecks, especially in the energy sector. Creating an environment conducive to the development of the private sector; provide the young population with the skills required by employers; provide citizens with financial protection to achieve better health outcomes; and building governance and the rule of law to fully exploit the benefits of EU integration, unlock productivity gains and create quality jobs that foster integration. The gender gap in access to economic opportunities remains one of the biggest challenges for Kosovo. Further action is also needed to promote environmental sustainability, including the fulfillment of EU environmental law.
Hedging & Refinancing Options
According to the Country Risk Classification published by the OECD, hedging and refinancing options are available.