Kosovo’s Economy

Kosovo’s economy is new and dynamic. Its foundation has been transformed from a centralist and controlled economy, to a free-market economy. The goal now is to increase competition within the economy, while increasing its export capacity to reduce Kosovo’s trade deficit.

As an important location for business development, Kosovo offers comparative advantages such as: a young and well qualified population, natural resources, favorable climatic conditions, new infrastructure, a fiscal policy with the lowest taxation in the region, a geographic position with access to the regional CEFTA market and that of the European Union. As well as being a CEFTA member, in June 2009 Kosovo became a member of the IMF (International Monetary Fund) and the WB (World Bank) and it aspires to other strong economic and financial mechanisms such as EBRD, the World Trade Organzation WTO etc.

Vital Economic Statistics

  • No of Inhabitants: 2.2 million
  • Surface Area: 10,908 km²
  • GDP: 4.2 billion € (2010 est.)
  • GDP economic growth rate:4.0% (2010 est.)
  • GDP per capita:1909 €  (2010 est.)
  • GDP – by sector: agriculture 20%,   industry 20%, services 60%
  • Unemployment rate around 40.%
  • Inflation Rate: 3.5% (2010)
  • Energy:
  • Production: 5596 billion kwh (2010)
  • Spending: 6062 billion kwh (2010)
  • Trade Exchange
  • Exports: 295.0  million € (2010)
  • Main export partners: Italy (27.1%), Albania (10.4%,) Macedonia (8.9%),  Switzerland (6.0%) Germany (5.3%), China (5.0%) Turkey (3.2%), Serbia (2.1%),, Slovenia ( 1.3 %)..
  • Exported Goods: processed goods (56%), unprocessed materials (25%), food and live animals 6%, fuel 4%, machinery and transport equipment (3%), ec.
  • Imports: 2,157 million € (2010)
  • Main import partners: Macedonia (14.8%), Germany (13.0%), Serbia(12.1%), Turkey (7.0%), China (6.3%),Italy (4.7%), Albania (3.2%) Slovenia (3.0%),.
  • Imported Goods: machinery and transport equipment (21%), processed goods (20%), fuel (16%), food and live animals (16%), chemical products (10%) etc.
  • Natural Resources: lignite, zinc, lead, ferronickel and agricultural arable land.
  • Currency: EURO


Kosovo has a young and dynamic economy. It has been transformed from a centralized planned economy to an open market economy, which experienced its profound transformation after 1999 with the liberation of Kosovo from Serbia. One of the challenges it faced during the last decade is the process of privatization. During 2009 a total of 114 new socially owned enterprises (SOEs) were announced for privatization, raising the total number of SOEs tendered for privatization to 569 by the end of 2009. Of the above about 521 companies have signed sales contracts while 48 others are expected to be signed (25 of them were privatized in the special spin-off).

Situated in South Eastern Europe, Kosovo's economy has become part of the region’s economic integrations, which provide opportunities for market expansion in a very wide area. An aim in itself is already the increase of competitiveness of the economy by increasing its exporting capacity to reduce the trade deficit Kosovo currently has. As an important location for business development Kosovo offers a range of comparative advantages such as: a young and very qualified population, where the average age is very young, natural resources, favorable climate conditions, new infrastructure, fiscal policy with the lowest taxes in the region, geographical location with access to the CEFTA and the European Union regional market. In addition to being a member of CEFTA, in June this year Kosovo has joined the IMF (International Monetary Fund) and WB (World Bank) and aspires to join other powerful economic and financial mechanisms such as EBRD, World Trade Organization (WTO etc.).


During 2010 Kosovo reached an amount of around 2.45 billion Euros in trade flows, which compared with a year ago noted an increase of such exchange by about 17%.

Imports of Kosovo goods during year 2009 achieved an amount of about 2.16 billion Euros, representing nominal growth of 11.48%.

Kosovo exports in 2010 were 295.9 million Euros, representing nominal increase of about 79% compared with the previous year. Trade deficit was reduced to a slight degree from 91.5% in year 2009 to 86.3% in 2010 reaching the highest percentage of coverage since after the war at a rate of 13.7%.

Geographical distribution of Kosovo trade during 2010

Kosovo's main trading partners remain the European Union (EU) countries and regional countries (CEFTA members).

Kosovo Exports to the EU countries were 44.7% of the overall total exports, which compared with the previous year increased by 3.71%. Exports to CEFTA countries were 24.1% of total value, compared with the previous year there was a decrease of 25.39%, while exports to other countries include 31.2% of the total amount.

Kosovo exports by country group for year 2010

Kosovo imports from EU countries were 38.4% of the overall total, which compared to previous year increased by %. Imports from CEFTA countries were 37.3% of total value, compared with the previous year there was a decrease of %, while imports from other countries include 24.3% of the total amount.

Kosovo imports by country group for year 2010

Main partners of Kosovo in export and import

No.CountriesExport (000) €Participation % in the totalImport (000) €Participation % in the total

Kosovo imports from European Union countries the majority of vehicles, machinery and equipment, tobacco products, petroleum, construction materials, food products etc. Kosovo Exports to EU-27 market, show a low level of competitiveness due to the fact that they consist mainly of various scrap metals and the to a limited extent of some industrial products such as ferronickel, construction materials, timber products, etc.

Trade with other world countries

Although over 3/4 of Kosovo's trade is oriented towards the CEFTA countries and EU-27, Kosovo conducts trade exchanges with most of the world countries, mainly in terms of imports. Among those, Turkey is worth mentioning from which about 7% of the total value of imports is imported, as well as China from which Kosovo imports about 6.3% of total imports and the exports to this distant Asian country include 5% of the overall Kosovo exports.

Exports and structure of exported goods

The greater share of exports in 2010 with 51% accounted for processed goods, worth about 150.9m €, other unprocessed goods included 25% of exports amounting to 60.1 million. The rest includes: food and live animals 6%, fuel 4%, machinery and equipment 3%, beverages and tobacco 2%, chemical products 1% of the total value of exports. Below are comparisons with the previous year.

Export by product groups for year 2010 (2009)

Imports and structure of imported goods

Imports in 2010 consisted of machinery and transport equipment 21% at a value of around 453.1 million €, processed goods at 20% at a value of 431.5 million €, food and live animals 16% or 345.2 million €, fuel 16% or 345.2milion €, chemicals 10% with 215.8 million €, other processed goods 9% at € 194.2 million €, beverages and tobacco 5% with 107.9 million €, unprocessed materials at 3% at a value of about 64.7 million €, animal and vegetable fats 1% or € 21.6 million.

Imports by product group for year 2010 (2009)


Energy and Mining - Kosovo has great underground assets, with 14.700 million tons, it ranks fifth in the world for lignite reserves from which it also produces the highest amount of electricity. During 2008 Kosovo has produced 4738 billion kWh and has spent 5156 billion kw/h of electricity.

Reserves of this mineral, used as the main source of energy production in Kosovo, are estimated to last for 650 years at the current pace of extraction.

Lignite reserves are widespread in the basin of Dukagjin and Drenica, but mineral extraction is currently limited to the basin of Kosovo. Besides lignite Kosovo is also rich in zinc, lead, gold, cadmium and bismuth, bauxite, nickel, etc. The culture of lignite extraction dates back to Roman times, modern extraction of minerals in Kosovo began in the 1930s, with the establishment of the Trepca complex.

Agriculture and Livestock -
Kosovo is rich in agricultural land, 53 percent of the total area is arable land. Currently the agricultural sector contributes only 19 percent to the overall NVP and 15 percent of the export value. Food processing in Kosovo was traditionally led by social enterprises, whereas today these are inactive; new private companies have now started to operate in this field. Most of these companies are small and are not yet able to cover the largest part of market demand.

Investing in these companies, providing innovative management techniques could revive the agro-processing industry in Kosovo, to the point that
it could be competing in international markets.

Vineyards – Vineyards cultivation and wine production is an old tradition in Kosovo. In the golden years the wine industry in Orahovac alone had production capacity of up to 50 million liters per year. In 1989, Orahovac wine exports had reached 40 million liters that were mainly distributed in the German market. After the privatization of a portion of vineyards and the wine factory in Orahovac, a good part of the local market was able to be covered and it also found successful placement in the international market, especially European markets.

Construction -
In recent years the construction industry has become one of the most important sectors in the Kosovo economy. This sector continues to be a great economic potential for Kosovo, taking into account the need for construction of new settlements and road infrastructure. Government of Kosovo itself has decided to connect the country with the most important corridors in Macedonia, Albania and Serbia.

Textile Industry - Textile sector has been the second largest in Kosovo, while at the peak of its development 15 textile production social enterprises employed more than 1,000 people and achieved sales of up to 35 million euros. Despite recent developments in the region, as a result of which trade ties were broken, an analysis shows that 55 to 65 million euros could be achieved by exporting, in case of restoration of such ties. In this sector there is plenty of room for investors so that Kosovo once again produces finished garments from textiles produced in the region.

Tourism - Kosovo's tourism potential is closely linked to Kosovo's geographical position, surrounded on all sides by mountains, and being in the center of Balkans, the country has the potential for winter tourism. Mountains in the south of Kosovo, resorts such as Brezovica and Sharr Mountains are good and interesting opportunities for investors. Currently Brezovica resort includes three hotels, two restaurants and nine ski-lifts that are currently socially owned. Besides Brezovica, another place in the mountains which is used for winter tourism is the Bjeshket e Nemuna (Damned Mountains), located in western Kosovo. It is supposed that this tourism location has the potential to accommodate up to 30,000 visitors. The potential of this region is already being used by small private companies which have built private compounds in Bogaj village.

Banking System

The banking sector in Kosovo is estimated to be among the sectors with the best performance in the economy. Bank deposits and loans are increasing, while the range of financial services is expanding. The Central Bank has the authority to license, supervise and regulate financial institutions in Kosovo. The commercial banking sector consists of 8 banks. Commercial banks offer a full package of banking services, including: loans, guarantees, current accounts, savings accounts, term deposits, domestic and international transfers, as well as services for maintaining items of value, while in 2009 these banks increased their share capital by 9.3% rising to the level of 159.4 million €.

Banking sector, which represents the largest part of the financial sector in Kosovo, was characterized by an increased level of financial intermediation. In 2009, loans extended by the banking sector amounted to 1.4 billion euros, which is 7.7% higher than in the previous year. Structure of loans continues to be similar and dominated by retail sector loans. Regarding duration, longer term loans continue to increase their participation in the overall portfolio. A significant increase was observed with regard to deposits which amount to 1.74 billion euros, which is about 21% higher than the previous year. The main source of deposits continues to be households, while in terms of maturity short-term deposits are dominant. The increasing rate of financial intermediation to some extent is a result of increased competition in the banking sector, which among others, is manifested by more favorable interest rates to customers and higher quality services. The banking sector in Kosovo continues to be profitable, liquid and solvent. The good state of liquidity and solvency of the banking sector is shown by results obtained through a 'stress test' model which tests the sensitivity of the banking sector in different scenarios. Positive performance was observed in other financial sectors as well. The insurance industry has shown that it is an attractive sector for new investors since during 2008 another company entered this market. Moreover, besides the increase of activity with existing products, the insurance industry in Kosovo began offering a new service - that of life insurance. Insurance companies are stable and with a satisfactory level of capitalism. In 2009 there is an increase by two additional micro financial institutions which continue to support the local economy through lending. Loans extended by micro finance institutions amount to 57,500 million euros which represent an annual increase of 14.6%.

List of Commercial Banks in Kosovo

Banka Ekonomike
Rr. Migjeni 1,
10000 Prishtinë
tel.381 (0) 38 244 396
fax.381 (0) 38 243 828

Banka për Biznes

Rr. UCK, Nr. 41, Prishtinë
10000 Prishtinë
tel.381 (0) 38 244 666
fax.381 (0) 38 243 656, 657

ProCredit Bank
Rr.Nëna Terezë no.16
10000 Prishtine
tel.381 (0) 38 555 777
fax.381 (0) 38 248 777

Raiffeisen Bank Kosovo
Rr. UÇK Nr. 51,
10000 Prishtine
tel.381 (0) 38 22 22 22 142
fax.381 (0) 38 20 30 11 30

Banka Kombëtare Tregtare – Dega Kosovë

Qyteza Pejton, Rr. Kosta Novakoviç Nr.9
10000 Prishtinë
tel.381 (0) 38 222 910
fax.381 (0) 38 222 907

TEB sh.a.
Rr. Agim Ramadani 15
10000 Prishtinë
tel.381 (0) 38 230 000
fax. 381 (0) 38 224 699

Komercijalna Banka ad Beograd - Dega Mitrovicë
Rr. Kralja Petra Prvog 33
40000 Mitrovicë
tel.381 (0) 28 423 822
fax. 381 (0) 28 425 295

NLB Prishtina
Rr. Rexhep Luci nr.5
10000 Prishtinë
tel.381 (0) 38 234 111
fax. 381 (0) 38 246 189


Minister Bekim Çollaku
Bekim Çollaku