Page 31 - bne IntelliNews Southeastern Europe Outlook 2025

Prime Minister Albin Kurti announced that Kosovo's GDP is projected to exceed €10bn in 2024, with expectations that it will surpass €11bn in 2025.
The World Bank said that geopolitical uncertainties and domestic political risks could pose challenges to growth, but a reinforced EU accession process would likely strengthen economic prospects. As growth picks up, poverty levels are expected to decline, and a tighter labour market is likely to push up wages.
Concerns over human capital losses due to outmigration persist, yet migration could also encourage better utilisation of domestic skills. Efforts to increase female labour force participation, particularly through expanded childcare services, could help offset the impact of a declining population, while also enhancing early childhood education outcomes.
Fitch forecasts GDP growth to average 4.5% in 2024, moderating to nearly 4% in 2025-2026, slightly exceeding the trend rate. However, the emigration of skilled workers continues to weigh on economic performance, offset only partially by favourable demographics, including a young population with an average age of 30, and the potential for increased female workforce participation. Structural challenges also persist, such as a sizeable informal economy and relatively low levels of capital stock, which could limit long-term growth potential.
2.5.2 Industrial production
Industrial production in Kosovo declined by an annual 12.8% in August 2024. Between 2013 and 2024, industrial production in Kosovo averaged a growth rate of 9.44%, peaking at an all-time high of 70.1% in December 2023 and hitting a record low of -16.90% in June 2020.
In August 2024, the volume of turnover index increased by 9.35% compared to the same month in the previous year. The extractive industry (mining and quarrying) saw a significant rise of 48.95%, while electricity, gas, steam and air conditioning supply grew by 21.55%. Water supply, waste management and treatment activities recorded a 15.95% increase, and the manufacturing industry experienced a more modest growth of 3.02%.
Kosovo’s producer price index (PPI) went up by an annual 9.9% in the third quarter of 2024, after going up by 0.9% y/y in the previous quarter, statistics agency’s data indicated.
In the third quarter of the year, the PPI rose by 6.9% against the previous quarter.
31 SE Outlook 2025 www.intellinews.com