US Department of State has published its annual report on the Investment Climate in over 160 economies worldwide, including Kosova.

The section on Kosova highlights that ongoing tensions with Serbia continue to be a major obstacle to attracting foreign investments.

“A small but growing domestic market, limited regional integration, and ongoing tensions with Serbia remain the most significant barriers to attracting Foreign Direct Investments (FDI),” the report states.

The report notes that Kosova has taken steps to improve the investment climate through government actions aimed at simplifying business registration and reducing bureaucratic obstacles. However, economic growth and productivity remain constrained by structural issues, including a large informal economy, reliance on remittances for consumption, and high unemployment rates among women and youth.

The report also mentions that the government’s sometimes unpredictable economic policies, political interference in the economy, and limited public-private dialogue present additional challenges for investors.

“Investors are drawn to Kosova’s young population, low labor costs, proximity to the EU market, and natural resources. Global supply chain disruptions caused by the COVID-19 pandemic have sparked greater interest from some businesses in using Kosova as a base for production targeting the EU market,” the report states.

The US State Department recalls that the International Monetary Fund and the World Bank projected economic growth of nearly 4 percent for 2024, but foreign investments remain limited, while remittances from the Diaspora continue to represent a significant portion of Kosova’s Gross Domestic Product.

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