World Bank sees Kosovo's GDP contracting 8.8% in 2020, up 3.7% in 2021

However, the World Bank sees Kosovo's GDP growing by 3.7% in 2021 and by 4.9% in 2022, it said in its Europe and Central Asia Economic Update Fall 2020.

Employment is expected to drop and poverty to rise in 2020 due to the pandemic-induced decline in service exports and fall in investment and consumption. Increasing remittances should mitigate the impact of the contraction, the World Bank noted.

Kosovo's economic recovery will depend on a rebound in EU growth and the successful containment of the pandemic, as well as on the level of international travel restrictions and the financial sector response to a potentially prolonged crisis, it added.

"The outlook is also associated with upside risks, including an effective delivery of the Government-announced economic recovery plan, and an increase in investment contingent on the implementation schedule of the recent economic normalization agreement between Kosovo and Serbia," the international lender said in the report.