The International Monetary Fund (IMF) Executive Board has completed the fourth and final review of Kosovo's Stand-By Arrangement (SBA) and Resilience and Sustainability Facility (RSF). The conclusion of this review allows for the disbursement of SDR 13.352 million (€16.08 million) under the SBA and SDR 7.744 million (€9.32 million) under the RSF, bringing total disbursements under the RSF to SDR 61.95 million (€74.61 million). The SBA, treated as precautionary by Kosovo authorities, amounts to SDR 80.122 million (€96.50 million).
Kosovo's economy has shown strong performance with a growth rate of 4.4% in 2024, primarily driven by household consumption supported by private credit and rising wages. Inflation decreased significantly to an average of 1.6% in 2024 from 4.9% in 2022, while the external current account deficit widened to 9% of GDP due to increased imports from consumption and investment.
Despite global trade tensions, growth is projected at 4% for 2025 with inflation stabilizing at approximately 2¼%. Program implementation has been robust with all quantitative performance criteria for end-December 2024 met, alongside indicative targets for end-March 2025.
Two structural benchmarks were achieved: a cash forecasting function within the Treasury was implemented, and a roadmap for adopting the Supervisory Review and Evaluation Process was developed to assess bank risk profiles.
Bo Li, IMF Deputy Managing Director and Acting Chair, commented on Kosovo's progress: "The Kosovo authorities have successfully implemented a Stand-By Arrangement and an Arrangement under the Resilience and Sustainability Facility." He highlighted that prudent fiscal policies helped deliver low deficits and debt while supporting economic growth amid uncertainty.
Under the SBA, revenue mobilization improved through tax base broadening leading to higher tax collection. Public financial management reforms enhanced fiscal risk assessment capacity, improved fiscal reporting quality, and increased transparency.
The Central Bank of Kosovo (CBK) continues reform efforts to enhance governance, develop the financial sector, and strengthen resilience. The banking sector is expanding rapidly while maintaining strong capitalization.
Reform measures under the RSF have advanced strategic energy goals including renewable generation capacity expansion and pollution reduction.
Kosovo's economic indicators show continued growth with real GDP projected at around 4% annually through 2025 despite challenges such as unemployment rates hovering around double digits in previous years.
Sources: Kosovo authorities and IMF staff estimates