Despite being hit hard by the COVID-19 pandemic, Kosovo’s economy showed resiliency to inflationary pressure. In 2024, Kosovo’s GDP growth rate of 4.0 percent was driven mainly by exports and private consumption. Notwithstanding the lingering impacts of global supply chain disruptions, above average inflation levels, unreliable energy production, and anticipated expensive energy imports, economic growth in 2024 remained positive. The IMF forecasts a 3.8 to 4.0 percent real GDP growth in 2025 for Kosovo. As of August 2025, Kosovo’s financial sector and public sector finance remain stable. According to data published by the KSA on September 2025, real GDP growth for Q2 2025 reached 4.58 percent, surpassing IMF forecasts.
Due to the relative importance of imports for meeting consumer demand, the country maintains a persistent trade deficit. Leading export industries include agriculture, mining, and construction. Kosovo’s largest exports are scrap metal, nickel, lead, and textiles. Kosovo’s highly pro-American population welcomes U.S. investment in various sectors, including:
Energy: Kosovo is looking to expand its power generation capacity and diversify its energy supply, including through commitments to renewable energy. Kosovo has the world’s fifth largest lignite coal reserves, currently used mainly to fuel the five coal thermal units in its two power plants, known as Kosovo A and Kosovo B. These two plants, which generate over 90 percent of the country’s energy, are antiquated and regularly break down due to old age and delayed maintenance. Recognizing the need for modernization, the National Assembly passed the National Energy Strategy in 2023. By 2031, the data-driven and forward-looking strategy commits the government to: (1) increased generation from renewable energy sources to at least 35 percent of the generation mix; (2) a 32 percent reduction of greenhouse gas emissions; and (3) phasing-out of at least one lignite-fired generation unit. The strategy also foresees Kosovo completing all preparations for the introduction of a carbon pricing system by 2026.
The Ministry of Economy announced plans for additional procurement, targeting 950 megawatts of renewable energy projects with a total investment of €1.2 billion. To achieve these ambitious renewable energy goals, Kosovo is expected to rely on mechanisms such as auctions and Public-Private Partnerships (PPP), which are likely to attract further FDI in the coming years. With the help of the U.S. government, Kosovo launched and contracted its first-ever 100-megawatt solar auction in 2024 which is undergoing development. In addition to solar auctions, numerous international donors are working with Kosovo on other programs. Kosovo signed a $236 million Millennium Challenge Corporation (MCC) compact ($34 million co-funded by Kosovo) in July 2022. The MCC compact includes installing high-capacity batteries to store energy and stabilize the electricity grid, enhancing the country’s energy security. Additionally, in February 2023, the EU announced a €75 million Energy Support Package to expand subsidy and incentive schemes to increase energy efficiency with focus on vulnerable households.
Mining and Minerals: Historically an important contributor to Kosovo’s economy, mining has declined in relevance due to a lack of investment in equipment, facilities, development of new mines, and significant delays in processing mining license applications. The sector has significant foreign investment potential, and the Independent Commission of Mines and Minerals (ICMM) has issued over 500 exploration and mining licenses since 2007. However, the processing of new and renewal of licenses for exploration and exploitation has been significantly delayed in recent years, affecting foreign mining companies seeking to invest in Kosovo. In 2016, the Kosovo Assembly passed a law that transformed Trepca – the biggest mining company in Kosovo – from a socially owned enterprise into a joint stock company with the majority of shares belonging to the government. Kosovo is potentially a source of critical minerals, however, challenges include delays in issuance of exploration licenses and significant areas set aside by the ICMM and government as geographic areas of “of special interest.” Nickel and manganese are the most commonly prevalent minerals in Kosovo.
Telecommunications and Information Technologies: Kosovo’s telecommunications operators have transitioned to 5G services. The Government of Kosovo is working to position the country as a regional hub for information technology (IT)-related products and services, building on the strong IT and English-language skills within the workforce. There are a growing number of IT companies focused on outsourcing for European and U.S. companies, and the number of inbound and outbound call centers is growing. However, Kosovo Telecom, a state-owned company, remains under significant financial pressure.
Health: Kosovo has an urgent and growing need for quality basic and specialized health and medical services, personnel, facilities, and products. The sector is dominated by public-sector services, but private-sector investment has recently increased. Many Kosovan citizens travel to other countries in the region to meet their immediate health-care needs. Local solutions present a potentially lucrative opportunity for outside investors. As in other countries, Kosovo has experienced a rise in demand for telemedicine services from the COVID-19 pandemic. Dental clinics, eye surgery centers, and facilities offering cosmetic procedures are also on the rise.
Waste Management and Recycling: As a developing country, Kosovo’s waste has increased faster than its capacity to manage it. Illegal dump sites are common, landfills are insufficiently constructed and managed, and all hazardous waste must be exported for proper handling and disposal. Although recycling has only recently begun in Kosovo, certain companies in niche markets have been able to operate profitably in this sector. Kosovo will likely reform its waste collection, treatment, and storage infrastructure to comply with EU regulations.
Defense: Kosovo is prioritizing the expansion of its defense sector, including production of ammunition and drones. Kosovo’s strategic location in the Western Balkans, coupled with its liberal trade regime and expanding international agreements, are attractive attributes for companies seeking access to European markets. Major infrastructure projects proposed for the country, such as the proposed €1.9 billion ($2.1 billion) Durres-Pristina railway and a dry port near Pristina, could offer substantial boost to the country’ infrastructure.
Information and Communication Technology (ICT): Kosovo’s ICT sector is emerging as a dynamic and high-potential market, driven by a young, tech-savvy population and a government committed to digital transformation. With over 55 percent of Kosovo’s population under the age of 30, the country boasts a highly adaptable workforce eager to engage in cutting-edge technologies. Software development, cybersecurity, cloud computing, and e-governance solutions are anticipated areas of future development and modernization in the public and private sectors.
Other Services: As Kosovo’s economy develops, the need for expert financial, legal, architectural, engineering, software development, public relations, and graphic design services will grow.