Which Main Factors Have Influenced the Economic-Financial Growth in Kosovo and Other Countries of the Western Balkans

Shaqir Rexhepi^1, and Hidajet Shehu²

¹Department of Finance Accounting, Aleksander Moisiu, Durres, Albania

²Department of Finance Accounting, Agricultural University of Tirana, Albania

Cite this paper:
Shaqir Rexhepi and Hidajet Shehu. Which Main Factors Have Influenced the Economic-Financial Growth in Kosovo and Other Countries of the Western Balkans. Journal of Finance and Economics. 2024; 12(4):83-88. doi: 10.12691/jfe-12-4-1

Abstract

This paper highlights the investment factors that influence economic growth in Kosovo. During the last years, the capital market in Kosovo has undergone a significant growth, where as a factor have been the investments made by the private and public sector, and the high remittances brought by foreign countries. The emerging market has also attracted and embraced the attention and interest of international investors, influencing capital growth. The total capitalization of the market had increased in 2022 by 3.5%, this was mainly influenced by exports and private consumption. Growth remained strong even in the second half of 2023, supported by the manufacturing industry and the finance and insurance sector. Kosovo's export turnover has undergone a significant transformation, with exports of goods and services increasing by 17% in 2022, driven by the furniture manufacturing industry. Private consumption has also been boosted by an inflow of remittances worth 1.2 billion euros in 2022, or about 13% of GDP. The latest indicators reveal a strong increase in remittances in the first two months of 2023, reaching a growth of 14.7% year-on-year. Kosovo experienced a decline in both public and private investment in 2022. In terms of public investment, the slowdown has been partly caused by economic operators seeking to review their contracts due to rising costs. Inflation increased significantly in 2022, averaging 11.6%. It peaked in January 2023 at 11.9%, where it is expected to decrease gradually to 7% in 2023.

Keywords:
Economic growth public investments foreign direct investments total production

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