International Trade in Kosovo

News Related to International Trade in Kosovo

Business outline for Kosovo

Economic Overview

During the past few years, the economy of Kosovo has shown a very high growth, due to private consumption and public investments. The recession in Europe had a very slight impact in the country's growth due to the weakness of its exports and foreign investments, and the substantial increase of its public expenditures. Its GDP growth should accelerate from 4.6% in 2010 to 6% in 2011.

The country has to face an increasing deficit on its current accounts and the deterioration of its fiscal situation. In July 2010, the authorities have therefore signed a stand-by agreement with the IMF, which seeks to rebalance public finances, strenghten the banking system and improve the management energy revenues. Although the country's reconstruction phase can be considered as completed, the country now needs to create a productive economy. Kosovo receives a large part of its income from the international community and the diaspora. 

Kosovo is one of the poorest countries in Europe, the rate of extreme poverty is 15%. Unemployment affects 45% of the population, mainly among the young people. The educational level and the health conditions are worrisome.

FDI in Figures

Kosovo is at the very initial stage of collecting foreign investment data and the very little existing information is not made public. According to the IMF statistics, foreign investment has been low since 2008 and it should start again increasing in 2011. 

Among the country's assets there is a good potential in the areas that have hardly been exploited such as energy, mining and agriculture, as well as the low cost of transportation into the European markets. The business environment is not very attractive, mainly due to its legal insecurity. 

Most of the foreign investments in Kosovo were created as a consequence of its privatization and they essentially concern the banking sector, telecommunications, industry and construction. The main investors are Slovenia, the United Kingdom, Austria and the United States.

Foreign Trade Overview

The economy of Kosovo is among the most open in the region. Foreign trade represents 60% of the country's GDP.

Customs duties are relatively low. The products exported into the European Union are tax exempt because the country benefits from the non-reciprocal preferential agreement granted to the countries participating in the Stabilization and Association Process. 

Due to its limited industrial production, the level of imports into Kosovo is very high in relation to its exports. In 2010, the country showed a large trade deficit. Due to the slow development of the country, its negative trade balance will take several years to improve.

The main trading partners of Kosovo are the countries of the Central European Free Trade Agreement (CEFTA) and the European Union.