Overview (2024)

COUNTRY CONTEXT

Kosovo is a parliamentary republic and upper-middle-income country. It declared independence on February 17, 2008, and is recognized as an independent country by more than 100 United Nations members. Kosovo is a potential candidate for European Union (EU) membership and signed a Stabilization Association Agreement with the EU that has been in force since April 2016. The last parliamentary elections in the country were held on February 14, 2021, and the current government was elected on March 22, 2021.

Kosovo has experienced steady economic progress over the past decade, with a nearly 50% increase in per-capita income and a 35% reduction in the poverty rate. It has successfully transitioned away from a growth model based on high dependence on foreign aid inflows, outperforming peer countries of similar per-capita income thanks to a steady expansion in consumption and investment, with a strong impetus from diaspora inflows, public investment in infrastructure, and financial deepening, amid a stable fiscal stance and an environment of low inflation.

Although Kosovo’s growth has largely been inclusive, it has not been sufficient to provide enough formal jobs, particularly for women and youth. To continue to grow, Kosovo needs to unleash productivity gains and create more quality jobs. This will require addressing infrastructure bottlenecks, prioritizing human capital investment, and creating an environment more conducive to private sector development. Further actions are also needed to promote environmental sustainability, including the fulfillment of the EU’s environmental acquis.

Last Updated:Oct 10, 2023