The Central Bank of the Republic of Kosovo (CBK) has published the Financial Stability Report (FSR), providing an in-depth overview of the state of the country’s financial system, current challenges, and future expectations.

The report confirms the stability and resilience of the financial sector, supported by prudent supervision, effective risk management, and a strong regulatory framework. However, the CBK warns that the impacts of global economic uncertainties require continuous monitoring and timely response.

According to the report, Kosovo’s economy grew by 4.4% in 2024, driven by private consumption, investments, and exports. Inflation fell to 1.6%, mainly due to a decline in food prices and imported goods. For 2025, growth is projected at 4.1% with an average inflation rate of 3.3%.

The banking sector recorded rapid credit growth of 18.3%, driven by strong demand for financing from households and businesses, as well as improved lending conditions.

The report highlights that financial stability indicators remain within regulatory standards, and stress test results show a sector capable of withstanding macroeconomic shocks.

Liquidity remains high, supported by an increase in private sector deposits. The banking sector’s capitalization level is also assessed as adequate to absorb potential risks.

Although fiscal performance was positive and the public debt-to-GDP ratio declined, the current account deficit and the growing dependence on remittances and foreign investments remain challenges to long-term stability.

The CBK emphasizes that macroprudential policy will continue to focus on preventing systemic risks and maintaining financial stability.