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Kosovo's economy in the last decade, growth in numbers, decline in real life
2026-01-11 16:07:25 / KOSOVA
The economy of Kosovo has gone through various stages of development in the last decade: growth, decline, stagnation and crisis. Although official data from Kosovo institutions show that there is an increase in some economic indicators, on the ground citizens continue to complain about the deterioration of the standard of living.
The year 2025 closed with economic growth of 3.9 percent and the Central Bank of Kosovo's forecasts are that this year, this figure will reach 4.1 percent.
Growth, according to the CBK, will be supported by private consumption, a gradual recovery in exports, and easing inflation. However, in recent years – especially after the COVID-19 pandemic in 2020 and the start of Russia's full-scale invasion of Ukraine in 2022 – the rise in the cost of essential products and services has been among the most talked-about topics in Kosovo.
Citizens have often complained that inflation has reduced their purchasing power, forcing many of them to give up products and services, as salaries are not enough to cover all necessary expenses.
Meanwhile, officials from Kosovo institutions have emphasized that inflation is due to the state's continued dependence on the import of foreign products.
In order to mitigate inflation, the Government of Kosovo has increased salaries in the public sector. Meanwhile, the private sector has attempted to help with the "Superpuna" platform, which launched in 2023.
Through this platform, the Government subsidizes the employer by paying the employee's salary for the first six months, in the amount of the minimum wage of 350 euros. The employer then has the right to increase the salary value for the engaged employee.
But, this increase in wages, according to economic experts, has not translated into an improvement in the standard of living of citizens due to high inflation. In 2025, the number of employees exceeded 400 thousand, thus continuing the trend of increasing the number of employees with formal contracts.
Meanwhile, among the unemployed, there are mostly women, who bear the greatest burden of caring for the family and children.
The small number of nurseries, especially in rural areas, is considered one of the factors that has prevented women from entering the labor market. One issue that Kosovo's economy suffers from, according to experts in the field, is the high amount of products imported from foreign markets.
Despite the support of Kosovo producers, the trade deficit has not yet been changed due to limited production capacities.
The value of imports has already reached six billion, while the value of Kosovo products that have entered foreign markets is less than one billion euros.
Foreign investment in Kosovo is considered a driver of economic development. Although, in recent years, there has been an increase in foreign direct investment according to official figures, this has always prompted discussions that the majority comes from the diaspora investing in real estate.
Numerous bureaucratic procedures have previously been mentioned as an obstacle for foreign investors in Kosovo, while in recent years the value of investments from Kosovo abroad has increased. Money sent by the diaspora to their families in Kosovo remains one of the main pillars of the country's economy.
Remittances have a direct impact on the well-being of citizens, reducing poverty and increasing consumption.
However, the way these funds are used has not always been praised, as a shift in focus has been called for. According to experts, investing in capital projects would impact overall economic development. The main challenge remains translating economic growth into real welfare, through increased domestic production, stable wages, reduced import dependence, and the creation of a more favorable climate for long-term investments.
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