March 31 (SeeNews) - The European Bank for Reconstruction and Development (EBRD) said on Thursday it expects Kosovo's gross domestic product (GDP) to increase by 4% in 2022, down 0.5 percentage points compared with its November projection.
In 2023, Kosovo's economy is projected to expand by 4%, the EBRD said in a special edition of its Regional Economic Update that addresses the effects of the Ukrainian war on global economy.
Describing the effects of the war as ‘the greatest supply shock since at least the early 1970s,’ the bank projects that the increased cost for commodities such as food, oil, gas and metals will have a profound impact on economies, particularly those in lower income countries.
For the Western Balkans region the bank projects an economic growth of 3.2% in 2022 and 3.6% in 2023.
All Western Balkan countries would be adversely affected by higher oil prices, some by rising gas prices, while North Macedonia and Albania are more exposed than others to an increase in electricity prices as they import a significantly higher amount of power than they export, as well as Kosovo, according to the EBRD.
Indirect effects on Western Balkan economies from a wider European and global recession could be significant, given the close interlinkages between the Western Balkan and eurozone economies, it added.
Kosovo's economy is estimated to have grown by 7.7% in 2021 after shrinking 5.3% in 2020.