The International Monetary Fund (IMF) estimates that Kosovo’s economy is slowing down, while prices and inflation continue to rise, calling for greater caution in the management of public finances.

According to its latest report, economic growth fell to 3.6% in 2025, down from 4.6% a year earlier. For 2026, it is expected to decline further to around 3.3%.

Meanwhile, inflation is projected to reach about 5.9%, driven mainly by higher food prices, according to the report released after the IMF Executive Board concluded its Article IV consultation with Kosovo on March 27, 2026, KosovaPress reports.

The IMF highlights that one of the main issues is that Kosovo is spending more money abroad than it earns from abroad. This gap has widened to 9.2% of GDP and is expected to exceed 10% in 2026. The report notes this is due to high imports, especially of energy and food, while exports remain lower.

The IMF warns that the economy could face additional risks, including regional conflicts, global tensions, and domestic political uncertainties.

In this situation, the IMF recommends that Kosovo avoid significantly increasing public spending in 2026 and instead focus on economic stability. It also calls for higher-quality public investment, improved revenues, and tighter control of expenditures.

Regarding the financial sector, the IMF says it remains stable but calls for further strengthening of supervision and risk management.

The report also stresses the need for reforms that support faster economic growth, job creation, and greater participation of women in the labor market.

On a positive note, the IMF says that European Union assistance and programs could help support Kosovo’s economic development. /KosovaPress/