Kosovo is one of the most open economies in the region, with trade representing 99% of its GDP (World Bank, latest data available). The government is currently negotiating Kosovo’s membership in the World Trade Organization (WTO) but has not made much progress in this regard since 2017. According to data by the national Agency of Statistics, in 2021 the country’s main exports comprised base metals and articles thereof (32.3%); miscellaneous manufactured articles (20.7%); plastics, rubber and articles thereof (10.6%); and prepared foodstuffs, beverages and tobacco (7.6%); whereas imports were led by mineral products (13.4%); machinery, mechanical and electrical equipment (12.8%); and prepared foodstuffs, beverages and tobacco (11.9%).
According to official data, the country's exports to the EU-27 accounted for 31.5% of the total in 2021, mostly to Germany (8.2%), Italy (8%), and the Netherlands (2.7%). Germany (13.1%), Italy (5.9%), Greece (4.4%), and Slovenia (3.8%) were the main import partners. In 2016, Kosovo implemented the Stabilization and Association Agreement (SAA) negotiations with the EU, focused on trade liberalization. Products exported to the European Union are tax-exempt because the country benefits from the non-reciprocal preferential agreement granted to countries participating in the Stabilisation and Association Process. However, border tensions with Serbia impede the expansion of trade, although the government recently announced the removal of the tariff on imports of goods from Serbia and Bosnia and Herzegovina.
Kosovo has a small domestic market and limited industrial production, and its imports remain higher than exports. The country’s trade deficit reached USD 3.9 billion in 2021, from 2.8 billion one year earlier: in fact, although exports increased faster than imports (+59.1% y-o-y, to USD 755.7 million), imports totalled USD 4.68 billion (+42.1% y-o-y). According to preliminary figures, exports of goods reached USD 920.4 million, against USD 5.63 billion in imports in 2022.
|Foreign Trade Indicators||2017||2018||2019||2020||2021|
|Imports of Goods and Services (Annual % Change)||7||6||-0||-14||n/a|
|Exports of Goods and Services (Annual % Change)||3||9||-2||-12||n/a|
|Foreign Trade (in % of GDP)||83||82||82||74||60|
|Imports of Goods and Services (in % of GDP)||39||38||39||37||n/a|
|Exports of Goods and Services (in % of GDP)||42||46||44||37||n/a|
Source: World Bank - Latest available data.
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Latest Update: September 2023