The effects of the Covid-19 Pandemic on Kosovo’s Economy

Dr. Sc. Halil Halili

Kosovo Center for Sustainable Development


This paper includes an analysis of the state of Kosovo’s economy during 2020, with an emphasis on the microeconomic and macroeconomic effects of the Covid-19 pandemic. After consulting numerous sources, we have presented the impact of this crisis on the economy with a focus on some of the concrete indicators that identify the Kosovar economy. In reality, Kosovar companies have first felt the effects of the Covid-19 pandemic, since January 2020 due to the beginning of the decline in imports from China. Then the crisis in Italy has increased the effects even more because Italy, excluding Germany, is the most important foreign trade partner of Kosovo. But the real problem in Kosovo occurred in mid-March 2020 when it came to the detention of economic activities, rising unemployment and declining public revenues. The paper addresses the Kosovo Economy 2020, presenting expectations for economic raise / decline, economic developments during the year, Remittances, Foreign Direct Investment (FDI) in Kosovo and impacts on the banking system. In the last part are the conclusions which include concrete findings from the broad economic structure scoring almost all economic indicators. The paper also includes specific macroeconomic simulations which are related to estimates of Kosovo’s GDP trends in 2020 and estimates of the increase in the number of unemployed people as a direct consequence of the pandemic.

Keywords: Economy, Kosovo, Pandemic Covid-19, crisis


Expectations were that Kosovo’s economy would shrink by about 5% by 2020 as a result of the Covid-19 Pandemic, according to a report by the European Bank for Reconstruction and Development (EBRD). According to the EBRD, the reason for this decline is the reduction of investments by 9 percent, the construction sector by 12 percent and the impact of the pandemic in almost every sector. In the first half of 2022, visits from the Kosovar diaspora fell by about 35 percent. However, according to the EBRD, despite the reduced visits, the Kosovar diaspora sent 10 percent more money than in the first seven months of 2019.

The global economy also decreased in the second quarter of 2020, global production was 10% lower than at the end of 2019, before the Covid-19 Pandemic broke out. The Organization for Economic Co-operation and Development (OECD) has called the decline “an unparalleled shock of modern times”. Expectations were that China would be the only major economy to expand in 2020, by about 1.8 percent. The United States, which have the largest economy in the world, will face an economic contraction of 3.8 percent, or smaller than other developed countries. The German economy was expected to shrink by 5.4 percent, compared to 7.9 percent at the Eurozone level.

Volume 6.No.2(2022): April – (Social Sciences Session)

ISSN 2661-2666 (Online) International Scientific Journal Monte (ISJM)
ISSN 2661-264X (Print)

DOI : 10.33807/monte.20222547


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