key economic indicators
The real development of the economy measured by the gross domestic product (GDP) has been favourable in the past years, showing a positive and continuously increasing trend. As donor support is decreasing, the private sector demand and investments are becoming the most important factors behind economic growth. They are mainly being driven by the fast expanding financial sector. Moreover, the Kosovo Government runs a stable and forward-looking fiscal policy. The tax revenue base has been widened, thus enabling the government expenditures to increase and in turn support economic growth.
Apart from the favourable economic performance, Kosovo runs a very stable monetary policy. Kosovo is one of the few countries outside the EU-zone that has introduced the Euro as its official currency. The use of the Euro has provided the grounds for low inflation and a stable macroeconomic environment. By eliminating the exchange rate risk, transaction costs have been reduced, thus facilitating the promotion of trade and investment. Due to the absence of monetary instruments resulting from the use of the Euro, Kosovo does not run any monetary policy risk either. Prices are therefore expected to remain stable in the future.