Kosovo: Trade Profile
Kosovo is one of the most open economies in the region, with trade representing 84% 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 the International Trade Statistics of Kosovo data of December 2021, the main exports consisted of miscellaneous manufactured articles (30.5%); base metals and articles thereof (22.1%); plastics, rubber and articles thereof (11.8%); prepared foodstuffs, beverages and tobacco (9%); whereas imports were led by mineral products (15%); machinery, mechanical and electrical equipment (14%); and prepared foodstuffs, beverages and tobacco (12.5%).
According to Kosovo International Trade Statistics, the country's exports to the EU-27 accounted for 26.5% of the total, mostly to Germany (9.4%), Italy (2.9%), and the Netherlands (2.3%). Germany (12.0%), Italy (7.2%), Slovenia (4.7%), and (4.3%) 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 increased by 38.3% year-on-year to 3.9 billion euro (USD 4.4 billion) in 2021: exports rose by 57.9% year-on-year to EUR 749.7 million, while imports increased by an annual 41.1% to EUR 4.65 billion.
| 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: February 2023
