The economy of Kosovo is projected to experience a gradual slowdown in growth for the coming year, while inflation is anticipated to rise significantly. According to the Central Bank of Kosovo (BQK), the country's economic growth is forecasted to reach 3.5 percent in 2026, down from the 3.6 percent recorded in 2025. Inflation, on the other hand, is expected to increase further, though specific figures have not been released yet. The BQK’s annual report, which was approved by its Board and subsequently submitted to the Assembly, highlights that the economy has continued to grow throughout 2025, albeit at a slower pace compared to previous periods.
According to the report, real GDP growth reached 3.6 percent in 2025, reflecting a moderation in economic activity. This slowdown is attributed primarily to developments in the external sector, particularly the negative impact of imports of goods and services. However, domestic consumption, investments, and exports of services have continued to support economic growth. Domestic consumption, as the main component of internal demand, contributed 3.9 percentage points to real GDP growth, slightly lower than the 4.8 percentage points recorded in 2024. This contribution was supported by increases in primary income sources and a slowdown in price rises.
Investments also played a role in driving growth, contributing 2.9 percentage points to real GDP growth in 2025, up from 2.1 percentage points in 2024. This increase is largely due to public investment growth. On the other hand, the external sector had a negative impact, with net exports contributing negatively to growth by -3.1 percentage points. The report notes that exports of goods and services contributed positively by 3.2 percentage points, while imports had a negative impact of 6.4 percentage points. The trade deficit widened as imports of goods and services increased by 8.8 percentage points, with goods imports rising by 10.4 percentage points and service imports growing more slowly at 3.0 percentage points compared to 15.9 percentage points in 2024. Meanwhile, the influx of diaspora visitors boosted export of services by 11.5 percentage points, while goods exports declined by 5.5 percentage points in real terms.
For the upcoming year, the BQK projects a more modest rate of economic growth, estimating that the overall economic activity will grow by 3.5 percent in 2026. The report suggests that this growth will be driven mainly by internal demand, specifically consumption and exports. However, challenges such as global trade tensions and uncertainties in international markets could continue to exert downward pressure on the growth rate. Factors that are expected to influence this growth include remittances from the diaspora and stabilization of prices in international markets, both of which could affect consumer and investor confidence. Internal demand is projected to contribute 3.0 percentage points to GDP growth, with private consumption expected to contribute 3.3 percentage points, supported by higher remittances, wage compensation, and personal credit availability. Investments, however, are expected to have a negative impact of 1.0 percentage point, while exports of goods and services are projected to contribute positively by 2.9 percentage points, especially as a result of increased spending by the diaspora. Import of goods and services is expected to continue to pose a challenge, though the exact magnitude of their impact remains under review.
Businesses in Kosovo are preparing for the summer season, which typically sees a surge in economic activity, particularly in sectors such as gastronomy, hospitality, and services. Restaurants and hotels report increased foot traffic, while shops and markets note higher sales each year. However, some businesses have raised prices following the return of migrant workers, who often bring additional funds into the local economy. Economists view the migration season as an infusion of capital that supports the national economy. Nevertheless, concerns remain among industry experts regarding the increasing portion of remittances being spent on consumption and housing rather than reinvestment. According to the Central Bank of Kosovo, remittances sent back to the country from abroad exceeded 313 million euros within the first three months of the current year alone. Germany, Switzerland, Italy, and Austria are the top contributors to these remittances, highlighting the significant role of the diaspora in supporting the local economy.
2 reports
Koha.netIndependentCenterFactual 85Objective 704 days agoThe Central Bank of Kosovo (BQK) has released its annual report for 2025, projecting a slower economic growth rate of 3.5% compared to previous years, alongside a moderate inflation increase of 6.7%. The report highlights that the economy continues to rely primarily on consumption and exports, but faces risks from geopolitical tensions and global economic uncertainty. It notes that while GDP growth was positive at 3.6%, this reflects a moderation in economic activity influenced by negative contributions from imports of goods and services. Consumption remained a key driver, contributing 3.9 percentage points to GDP growth, supported by increased funding sources and slowed price increases. Public investment also contributed positively, rising to 2.9 percentage points. However, net exports had a negative impact due to higher import levels, particularly of goods, which led to a trade deficit. The report also mentions that tourism-related service exports saw significant growth, offsetting some of the decline in goods exports.
Bias read (Center): The article presents a balanced overview of the economic situation based on data and projections from the Central Bank of Kosovo. While it discusses potential challenges such as inflation and external dependencies, it does not take a clear ideological stance or emphasize specific political agendas.
Why these scores (Factual 85 · Objective 70): The article accurately reports the BQK's economic forecast for Kosovo, citing specific growth and inflation rates. It references the statistical agency and aligns with the cross-source consensus. However, it uses emotionally charged language like 'rreziket kryesore' which may bias the narrative.
RTKState / PublicCenterFactual 80Objective 757 days agoDuring the summer months, the return of the diaspora to their home country has led to increased economic activity, particularly in the hospitality, gastronomy, and service sectors. Restaurants and hotels are being frequented more often, and local markets report higher sales annually. However, some businesses have raised prices in response to the influx of visitors. Economic experts describe the diaspora as a vital injection for Kosovo's economy. Concerningly, they note that remittances from the diaspora are primarily used for consumption and housing rather than investment. According to the Central Bank of Kosovo, over 313 million euros were sent by the diaspora to Kosovo in just the first three months of this year, with Germany, Switzerland, Italy, and Austria being the top contributors.
Bias read (Center): The article presents a balanced view of the economic impact of the diaspora, noting both positive contributions and concerns regarding the use of remittances. It cites economic experts and provides data from the Central Bank of Kosovo without apparent bias toward any particular political stance.
Why these scores (Factual 80 · Objective 75): This article provides factual data on summer economic activity and remittances from the diaspora, supporting the cross-source consensus. It maintains a relatively neutral tone but includes some subjective statements about business readiness and potential price increases.
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