The World Bank has forecasted that Kosovo’s economic growth is expected to reach 3.8% during the years 2025-2026.
The World Bank also predicts that the combined economic growth rate of Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia, and Serbia will reach 3.2% in 2025.
Economic growth in the Western Balkans is projected to slow down moderately in 2025 due to lower external demand and economic uncertainties arising from changes in global trade policies, which may affect business and consumer confidence, according to the World Bank’s Economic Regular Report for the Western Balkans published today.
The World Bank emphasized that Kosovo’s economic growth would be supported by consumption and investment activity, but economic uncertainty, particularly regarding global trade policies, has increased in recent months. Delays in forming a new government may negatively impact investments and the implementation of structural reform agendas. Furthermore, a slowdown in economic activity in the EU and growing trade insecurity may adversely affect Kosovo’s economic growth.
Domestically, delays in forming a new government may hinder investments and the implementation of necessary reforms.
“The Kosovo economy continues its strong performance, but Kosovo needs to generate additional resources to meet growing investment needs, especially in energy, infrastructure, human capital, and connectivity sectors,” the report stated.
Further progress in poverty reduction will depend on the ability to increase private sector competitiveness and sustain higher economic growth in the future.
“A tighter labor market may help increase wages, while policies aimed at improving education quality and skills development for lower-skilled workers could provide an additional boost,” the report added.
Population decline, partly due to migration, could be compensated by increased female participation in the workforce, currently limited by factors such as the lack of childcare services. Expanding childcare services would improve women’s opportunities in the job market and enhance children’s readiness for school through better early childhood education, thus creating more job opportunities.
