May 13 (SeeNews) - The European Bank for Reconstruction and Development (EBRD) said on Wednesday it expects Kosovo's gross domestic product (GDP) to contract by 5% this year, reversing its November forecast for 4.0% growth.
Kosovo's economic output is expected to return to growth in 2021 by expanding by 7.5%, the EBRD said in its May 2020 Regional Economic Prospects report.
The projected drop of GDP in 2020 will be a result of the restrictions on economic activity that the government has imposed in order to limit the coronavirus spread, as well as a consequence of a likely decline in remittances.
Kosovo saw its GDP expand by 4.2% in 2019 following 3.8% growth in 2018, mostly due to increased domestic demand, as investment and private consumption contributed equally.
However, Kosovo has the highest unemployment rate in the region, with one in four people unemployed. Among young people, one in two citizens is unemployed.