Kosovo: Economy Overview

Over the past few years Kosovo's economy has shown significant progress in transitioning to a market-based system and maintaining macroeconomic stability, but it is still highly dependent on the international community.

Economy Overview

Over the past few years Kosovo's economy has shown significant progress in transitioning to a market-based system and maintaining macroeconomic stability, but it is still highly dependent on the international community and the diaspora for financial and technical assistance. Remittances from the diaspora - located mainly in Germany, Switzerland, and the Nordic countries - are estimated to account for about 18% of GDP, and donor-financed activities and aid for approximately 10%. Kosovo's citizens are the poorest in Europe with an average annual per capita income (PPP) of $7,400. Unemployment, around 45%, is a significant problem that encourages outward migration and a significant informal, unreported economy. Most of Kosovo's population lives in rural towns outside of the capital, Pristina. Inefficient, near-subsistence farming is common - the result of small plots, limited mechanization, and lack of technical expertise. With international assistance, Kosovo has been able to privatize a majority of its state-owned-enterprises. Minerals and metals - including lignite, lead, zinc, nickel, chrome, aluminum, magnesium, and a wide variety of construction materials - once formed the backbone of industry, but output has declined because of ageing equipment and insufficient investment. A limited and unreliable electricity supply due to technical and financial problems is a major impediment to economic development, but Kosovo has received technical assistance to help improve accounting and controls and, in 2012, privatized its distribution network. The US Government is cooperating with the Ministry for Energy and Mines and the World Bank to prepare commercial tenders for the construction of a new power plant, rehabilitation of an old plant, and the development of a coal mine that could supply both. In July 2008, Kosovo received pledges of $1.9 billion from 37 countries in support of its reform priorities, but the global financial crisis has limited this assistance and also negatively affected remittance inflows. In June 2009, Kosovo joined the World Bank and International Monetary Fund, and Kosovo began servicing its share of the former Yugoslavia's debt. In order to help integrate Kosovo into regional economic structures, UNMIK signed (on behalf of Kosovo) its accession to the Central Europe Free Trade Area (CEFTA) in 2006. Serbia and Bosnia previously had refused to recognize Kosovo's customs stamp or extend reduced tariff privileges for Kosovo products under CEFTA, but both countries resumed trade with Kosovo in 2011. The official currency of Kosovo is the euro, but the Serbian dinar is also used illegally in Serb enclaves. Kosovo's tie to the euro has helped keep core inflation low. Kosovo maintained a budget surplus until 2011, when government expenditures climbed sharply.

GDP (purchasing power parity):
    Field info displayed for all countries in alpha order.
$13.56 billion (2012 est.)
country comparison to the world: 143
$13.07 billion (2011 est.)
$12.45 billion (2010 est.)
note: data are in 2012 US dollars
GDP (official exchange rate):
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$6.3 billion (2012 est.)
GDP - real growth rate:
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3.8% (2012 est.)
country comparison to the world: 87
5% (2011 est.)
3.9% (2010 est.)
GDP - per capita (PPP):
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$7,400 (2011 est.)
country comparison to the world: 136
$6,700 (2011 est.)
$6,400 (2010 est.)
GDP - composition by sector:
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agriculture: 12.9%
industry: 22.6%
services: 64.5% (2009 est.)
Labor force:
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800,000
country comparison to the world: 148
note: includes those estimated to be employed in the grey economy (2011 est.)
Labor force - by occupation:
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agriculture: 23.6%
industry: NA%
services: NA% (2010)
Unemployment rate:
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45.3% (2011 est.)
country comparison to the world: 191
45.4% (2010 est.)
note: Kosovo has a large informal sector that may not be reflected in these data
Population below poverty line:
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30% (2010 est.)
Distribution of family income - Gini index:
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30 (FY05/06) (FY05/06)
country comparison to the world: 116
Investment (gross fixed):
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35% of GDP (2010 est.)
country comparison to the world: 10
Budget:
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revenues: $1.74 billion
expenditures: $2.06 billion (2011 est.)
Taxes and other revenues:
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27.6% of GDP (2011 est.)
country comparison to the world: 114
Budget surplus (+) or deficit (-):
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-5.1% of GDP (2011 est.)
country comparison to the world: 159
Public debt:
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5.5% of GDP (2011)
country comparison to the world: 147
6.2% of GDP (2010)
Inflation rate (consumer prices):
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8.3% (2011 est.)
country comparison to the world: 182
3.5% (2010 est.)
Commercial bank prime lending rate:
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13.86% (31 December 2011 est.)
country comparison to the world: 55
14.31% (31 December 2010 est.)
Agriculture - products:
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wheat, corn, berries, potatoes, peppers, fruit; dairy, livestock; fish
Current account balance:
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-$2.88 billion (2012 est.)
country comparison to the world: 148
-$900 million (2011 est.)
Exports:
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$419 million (2011 est.)
country comparison to the world: 175
$400 million (2010 est.) (2010 est.)
Exports - commodities:
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mining and processed metal products, scrap metals, leather products, machinery, appliances, prepared foodstuffs, beverages and tobacco, vegetable products, textile and textile articles
Imports:
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$3.3 billion (2011 est.)
country comparison to the world: 144
$2.7 billion (2010 est.) (2010 est.)
Imports - commodities:
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foodstuffs, livestock, wood, petroleum, chemicals, machinery, minerals, textiles, stone, ceramic and glass products and electrical equipment
Reserves of foreign exchange and gold:
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$NA
Debt - external:
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$326 million (2011 est.)
country comparison to the world: 176
$900 million (2010 est.)
Stock of direct foreign investment - at home:
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$21.2 billion (31 December 2012 est.)
country comparison to the world: 70
$24.4 billion (31 December 2011 est.)
Exchange rates:
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euros (EUR) per US dollar -
0.7838 (2012 est.)
0.7185 (2011 est.)
0.755 (2010 est.)
0.7198 (2009 est.)
0.6827 (2008 est.)

Source: CIA - The World Factbook