Kosovo Human Development Report 2010 - UNDP Kosovo - United ...

Table
2.2
mestic Product (GDP) from 2000-2001.
However, as the post-conflict boom
subsided, growth in 2002–2005 significantly
slowed down. A reduction
in international financial support and
the scaling-back of the United Nations
(UN) presence hit GDP growth from
construction and trade. Kosovo’s agriculture
and industrial sectors – which
had never fully recovered – were also
affected.
In 2005-2008, GDP once again accelerated,
growing at an average annual rate
of more than 4 percent, even reaching
5.4 percent in 2008. Growth was mainly
driven by strong domestic demand
(consumption and investment) fuelled
by domestic credit growth, 33 a significant
increase in public investment and
sustained levels of worker remittances
and donor activity. The privatization
process also made its incremental contributions
to investment and growth in
recent years. Privatization accelerated
in 2005 after a very slow start in 2004.
This led to an increase in the overall
level of investment (both domestic
and foreign) and export growth, (see
Table 2.2).
Main Macroeconomic Indicators, 2003 – 2010
34 | KOSOVO HUMAN DEVELOPMENT REPORT 2010
The recent global economic downturn
affected Kosovo through a decline
in exports, foreign investment and remittances.
Exports recorded a decrease
by 18 percent (from 198.5 million EUR
in 2008 to 162.6 million EUR to 2009).
However, as exports of goods only account
for about 5 percent of GDP, the
impact has been small relative to the
impact in neighbouring countries. According
to preliminary data from CBK,
in 2009 foreign direct investment (FDI)
in Kosovo declined by 20.5 percent
(from 366 million EUR in 2008 to 291
million EUR in 2009) since the global
financial crisis negatively affected investors’
interest in major destinations
for FDI including the energy sector.
Remittances, the single largest inflow
category in the balance of payments,
have not yet witnessed the sharp decline
that some had feared. However,
Kosovo escaped the worst impact of
the crisis, ironically, because of its limited
integration into the global economy.
GDP growth reverted to 4 percent
in 2009.
Public expenditure, particularly
for capital investment, also increased
over the period of 2008-2009. Kosovo
Main Indicators/Years 2003-2005 2006 2007 2008 2009 2010
Growth rates 34 %
GDP 3.0 3.9 5.0 5.4 3.8 4.3
GDP per capita 0.1 2.4 3.8 3.8 2.3 2.8
Consumer Price Index (CPI) -0.7 0.6 4.4 9.4 -2.2 1.4
% of GDP
Revenues 20.2 22.3 25.9 25.3 29.5 25.4
Expenditures 22.2 19.9 18.9 25.3 31.3 29.7
Primary balance -2.0 2.4 7.0 0.0 -1.8 -4.3
Current account balance (after grants) -7.6 -4.4 -10.2 -16.3 -18.4 -17.3
Nominal GDP (in millions of EUR) 3,023 3,191 3,464 3,724 3,792 4,028
Nominal GDP per capita (in EUR) 1,480 1,520 1,629 1,726 1,731 1,812
Population (in thousands) 2,042 2,100 2,126 2,158 2,190 2,223
Source: Macroeconomic Department, MEF and IMF Aide-Memoire, September 2009