Delays in forming a new government could negatively impact investments and the implementation of the structural reform agenda, according to a World Bank report on Kosovo, where the bank's projections show that Kosovo is expected to have an economic growth rate of only 3.8 percent for the current year and 2026.

On the other hand, the Central Bank of Kosovo (CBK) predicts that this rate will reach 4.1 percent in 2025. Meanwhile, according to the CBK, this rate is expected to increase to 4.2 percent in 2026, KosovaPress reports.

These Gross Domestic Product (GDP) values, according to economic experts, are not sufficient for the country's economic development and the reduction of unemployment in Kosovo. They even express skepticism that economic growth of 4.1 percent will be achieved this year.

As they say, the European Union's sanctioning measures, the suspension of strategic dialogue with the United States of America, and the lack of effective governance ensure that this norm remains as it is, not being sufficient to improve the lives of citizens in our country.

Economics professor Muhamet Sadiku, in a statement to KosovaPress, emphasizes that the CBK's assessments are not optimistic, as the current economic growth rate is considered insufficient in the face of the challenges that Kosovo faces.

He mentions the low level of exports, the lack of investments, especially foreign ones, as well as inflation projections, which, according to him, show signs of economic survival.

"The assessments of the CBK and the International Monetary Fund are unfortunately not optimistic, because this rate of economic growth in relation to the problems that Kosovo faces is insufficient. Considering the low level of exports, the low level of investment mobilization, especially the lack of foreign investment, all this is reflected in the fact that Kosovo with this rate, and considering the projections for inflation in the coming year, shows signs of survival... Kosovo's economic growth must be transformed into economic development... This economic growth must be confronted with the problems arising from the imposition of European Union sanctions on Kosovo and especially the recent events related to the interruption of the strategic dialogue with the US, and both of these things, coupled with the lack of effective governance, make this rate insufficient for Kosovo's ambitions to become part of the EU and to improve its life," says Sadiku.

Likewise, economic expert Lekë Musa emphasizes that the current growth rate of over 4 percent is not sufficient to alleviate unemployment and improve welfare in Kosovo.

According to him, to reach the levels of countries in the region and the European Union, Kosovo must have economic growth of at least 8 percent, to reduce the unemployment rate even slightly.

"Considering that Kosovo lags behind the countries in the region and also has a high unemployment rate of over 10 percent, then the question arises whether this 4 percent is enough to alleviate unemployment and raise welfare or at least for Kosovars to live equally with the countries in the region. Eventually, we will also reach the welfare norm in the countries of the European Union, since that is our goal. If we compare the level of income per capita in Kosovo with the Balkan countries, this economic growth trend in Kosovo should be at least 8 percent. The growth should be at least twice as high as 4 percent, provided that the countries in the region remain where they are at the moment... Kosovo needs to at least double its economic growth and reduce this unemployment, which may be satisfactory for Kosovo at 5-6 percent. Then, economic growth should also be at least 10 percent per year to achieve a reduction in unemployment to some extent. 2 percent per year in the country," says Musa.

As Musa emphasizes in a statement to KosovaPress, to achieve a higher rate of economic growth in Kosovo, future governments must establish economic development as the main goal.

The World Bank's Regular Economic Report for the Western Balkans states that economic growth in Kosovo is expected to reach 3,8 percent in 2025 and 2026.

"Economic growth will be supported by consumption and investment activity. However, economic uncertainty, particularly related to global trade policy, has increased in recent months. Delays in the formation of a new government could negatively impact investment and the implementation of the structural reform agenda," the World Bank report says.

Kosovo held parliamentary elections on February 9, but the new institutions have not yet been formed. The Constitutional Court has imposed a temporary measure on the constitution of the Assembly until September 30.

Meanwhile, in a written response, the Central Bank of Kosovo says that for 2025, a real growth in Gross Domestic Product (GDP) of 4.1% is forecast, which is mainly supported by domestic demand and the export of services.

"The Central Bank of the Republic of Kosovo (CBK) for 2025 predicts a real growth of Gross Domestic Product (GDP) of 4.1%, which is mainly supported by domestic demand and the export of services. For 2026, growth is expected to reach 4.2%. However, in September, the Kosovo Agency of Statistics (KAS) is expected to publish data for the second quarter of 2025, as well as annual data for 2024, which will provide a clearer picture of developments in the Kosovo economy and will enable a review of these projections," the CBK's written response to KosovaPress states.

The President of the Kosovo Chamber of Commerce (KKC), Lulzim Rafuna, is skeptical about the Central Bank of Kosovo's forecast for economic growth of 4.1 percent. According to him, if the current trend continues, this rate will not be achieved, considering that the first half of the year ended with 3.6 percent growth.

Rafuna emphasizes that Kosovo needs a growth of at least 6–7 percent, while the ideal, according to him, would be a double-digit growth.

"This is a forecast by the Central Bank of Kosovo, a forecast that if this trend continues as we have today, I do not believe that we will reach 4.1 percent. Because we closed the first half of the year with 3.6. An economic growth that leaves no trace in any pore of Kosovo for a major change to be noticed, we should have a growth of 6-7 percent minimum. But, it would be better if we had had a double-digit economic growth... The recent actions with the issue of electricity but also the suspension of the strategic dialogue by the US, being under sanctioning measures, not completely executing the first amount in the budget law for capital investments, not helping with fiscal reforms, education, health, the rule of law to change an environment to make it better for investments, has pushed even domestic investors that we have Kosovars, have not expanded their investments in Kosovo but have taken them out of Kosovo", Rafuna emphasizes.

According to the World Bank, economic growth in Kosovo in 2023 was 4.1 percent, in 2024 this rate was 4.4, while the forecast for 2025 is 3.8 percent.

Otherwise, according to the World Bank report, economic growth in the Western Balkans is projected to slow to 3.2 percent in 2025, before recovering to 3.5 percent in 2026, amid increased uncertainties./kp/

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