Economy - overview:

Over the past few years Kosovo's economy has shown significant progress in transitioning to a market-based system, but it is still highly dependent on the international community and the diaspora for financial and technical assistance. Remittances from the diaspora - located mainly in Germany and Switzerland - account for about 30% of GDP. Kosovo's citizens are the poorest in Europe with an average annual per capita income of only $1800 - about one-third the level of neighboring Albania. Unemployment - at more than 40% of the population - is a severe problem that encourages outward migration. Most of Kosovo's population lives in rural towns outside of the capital, Pristina. Inefficient, near-subsistence farming is common - the result of small plots, limited mechanization, and lack of technical expertise. Economic growth is largely driven by the private sector - mostly small-scale retail businesses. With international assistance, Kosovo has been able to privatize 50% of its state-owned enterprises (SOEs) by number, and over 90% of SOEs by value. Minerals and metals - including lignite, lead, zinc, nickel, chrome, aluminum, magnesium, and a wide variety of construction materials - once formed the backbone of industry, but output has declined because investment has been insufficient to replace ageing Eastern Bloc equipment. Technical and financial problems in the power sector also impedes industrial development. The US has worked with the World Bank to prepare a commercial tender for the development of new power generating and mining capacity. The official currency of Kosovo is the euro, but the Serbian dinar is also used in the Serb enclaves. Kosovo's tie to the euro has helped keep inflation low. Kosovo has maintained a budget surplus as a result of efficient tax collection and inefficient budget execution. While maintaining ultimate oversight, UNMIK continues to work with the EU and with Kosovo's government to accelerate economic growth, lower unemployment, and attract foreign investment. In order to help integrate Kosovo into regional economic structures, UNMIK signed (on behalf of Kosovo) its accession to the Central Europe Free Trade Area (CEFTA) in 2006. In February 2008, UNMIK also represented Kosovo at the newly established Regional Cooperation Council (RCC).

GDP (purchasing power parity):

$4 billion (2007 est.)

GDP (official exchange rate):

$3.237 billion (2007 est.)

GDP - real growth rate:

2.6% (2007 est.)

GDP - per capita (PPP):

$1,800 (2007 est.)

GDP - composition by sector:

agriculture: 20%
industry: 20%
services: 60% (2007 est.)

Labor force:

832,000 (June 2007 est.)

Labor force - by occupation:

agriculture: 21.4%
industry: NA
services: NA (2006 est,)

Unemployment rate:

43% (2007 est.)

Population below poverty line:

37% (2007 est.)

Distribution of family income - Gini index:

30 (FY05/06)

Inflation rate (consumer prices):

2% (2007 est.)

Investment (gross fixed):

29% of GDP (2006 est.)

Budget:

revenues: $1.364 billion
expenditures: $1.008 billion (2007 est.)

Public debt:

NA

Agriculture - products:

NA

Industries:

mineral mining, construction materials, base metals, leather, machinery, appliances

Electricity - production:

3.996 billion kWh (2006)

Electricity - consumption:

4.281 billion kWh (2006)

Oil - production:

0 bbl/day (2007)

Oil - consumption:

NA bbl

Oil - proved reserves:

NA bbl

Natural gas - production:

0 cu m (2007)

Natural gas - consumption:

0 cu m (2007)

Natural gas - proved reserves:

NA cu m

Current account balance:

-$58.3 million (2007)

Exports:

$148.4 million (2007)

Exports - commodities:

mining and processed metal products, scrap metals, leather products, machinery, appliances

Exports - partners:

Central Europe Free Trade Area (CFTA) 56% (2006)

Imports:

$NA

Imports - commodities:

foodstuffs, wood, petroleum, chemicals, machinery and electrical equipment

Imports - partners:

EU 35%, Macedonia 15%, Serbia 13%, Turkey 8% (2006)

Economic aid - recipient:

$324 million (2007)

Reserves of foreign exchange and gold:

$NA

Debt - external:

according to the national bank of Serbia, Kosovo's external debt was around $1.2 billion; Kosovo was willing to accept around $900 million (2007)

Currency (code):

euro (EUR); Serbian Dinar (RSD) is also in circulation

Exchange rates:

euros per US dollar - 0.7345 (2007)