Kosova’s economy performed better than expected in 2024, with an estimated growth rate of 4.3%, supported by strong private consumption and investment. Despite this positive growth, the contribution from net exports remained negative due to rising imports, which contributed to a widening current account deficit compared to the first nine months of 2023.

Inflation in Kosova slowed significantly, dropping to around 1.6% on average in 2024, down from 4.9% in 2023. This decline was primarily driven by slower price increases in food and transportation. Although fiscal spending rose, particularly in capital investments and wages, the IMF forecasts a smaller budget deficit of 0.7% of GDP in 2024, due to a significant increase in government revenues.

GDP growth is projected to remain around 4% for both 2025 and 2026, with balanced risks. Kosovo may experience stronger growth if public investment projects are implemented quickly and the country successfully taps into €36 million in funding unlocked through the third successful review under the Stand-By Agreement and Stability and Sustainability Agreements with the IMF in December 2024. However, Kosova remains highly reliant on remittances from its Diaspora, and any adverse impact on the Eurozone could slow growth.

/a.p./