An Economic Outlook to the Republic of Kosovo and the recent impact of COVID-19

Due to its rapid spread the government of the Republic of Kosovo, in accordance with the recommendations of the National Institute of Public Health in Kosovo, and similar to most other countries in the world, starting from March 13, 2020 imposed measures which restricted many economic activities and then restricted the movement of people.

By Muhamet Klinaku, Department of Labour Market, Employment Agency of the Republic of Kosovo

The COVID-19 pandemic which appeared at the end of 2019, first in China and then spread throughout the globe reached Kosovo in March 2020. As a result, and due to its rapid spread the government of the Republic of Kosovo, in accordance with the recommendations of the National Institute of Public Health in Kosovo, and similar to most other countries in the world, starting from March 13, 2020 imposed measures which restricted many economic activities and then restricted the movement of people. Among other measures, all hotel and gastronomy businesses, interurban transport and other businesses that sell specialized goods (textiles, etc.) were closed. As a result, most Small and Medium Enterprises (SMEs) are already affected by the coronavirus in most countries of the world, and Kosovo is not an exception to having economic implications for the country.

Kosovo belongs to the group of upper-middle income countries group. Similar to the average growth trend in the respective group of countries, Kosovo has experienced constant growth rates over the past years. Figure 1 reveals that between 2010 and 2019 average real GDP growth was around 6%, varying between 3% and 9% over the years.

GDP growth rates have to some degree translated into increased employment opportunities and decreased unemployment throughout the years, as one of main economic issues that is challenging the Kosovo economy. According to the Kosovo Agency of Statistics, shown in Figure 2, labour force participation in the working age population has increased from 37.6% in 2015 to 40.5% in 2019, reflecting a decreasing rate of inactive people in the working age population.

In terms of women participation in employment, data reveal a persistently large degree of disadvantaging women in the labour market (see Figure 3).The same trend has followed in terms of employment rate (employed people in the total of the working age population) which has grown from 25.2% to 30.1% between 2015 and 2019. More importantly, the rate of unemployed people has decreased in the respective period, falling from 32.9% in 2015 to 25.7% in 2019. Despite small variations across the annual rates, data suggest a solid positive economic trend before the COVID-19 outbreak.

Youth unemployment also showed a decreasing trend (see Figure 4), reducing from 57.7% in 2015 to 49.4% in 2019. On the other hand, share of vulnerable groups in total employment has decreased from 22.8% to 18.8% between 2015 and 2019, which suggests for an average growing trend of more quality and decent work opportunities in the economy.

However, COVID-19 pandemic is continuing to affect the economy beyond initial expectations, so the situation remains uncertain. The Kosovo Government has estimated a GDP contraction of around 3% in 2020, while World Bank latest estimations suggests that it may be as high as 8.8%. The large decrease is due to worsening of the economic indicators, which have deteriorated as compared to initial estimations. However, World Bank outlook projections beyond 2020 are positive, suggesting for a GDP growth of over 3% in 2021 and over 4% in 2022. About 80 percent of Kosovo travel service exports are driven by Kosovar diaspora, whose arrivals in bigger numbers are expected to happen as soon as travel measures will be lifted, anticipated to influence spending and investment (World Bank Report, 2020).Despite a positive outlook that prevailed until 2019, COVID-19 pandemic outbreak in 2020, followed with restrictive policies by the government, has temporary reversed the growth trend. It has negatively affected economic activities, with stronger impact on the private sector, both in terms of income and jobs. Working hours have been reduced and many businesses offered their employees leaves of absence without pay (World Bank Business Pulse Survey, 2020). Some preliminary studies suggest that the number of unemployed has increased dramatically during the second quarter of 2020, The Kosovo Employment Agency has recorded around 80,000 additional job seekers[1].

[1] Source: Employment Agency of Republic of Kosovo , Report for 2020.

Closed (30/12/20) CfP: Welfare state and social policies in the CEE region

The peer-reviewed, open access scientific journal Problemy Polityki Społecznej/Social Policy Issues invites original paper submissions for a special issue to bring together papers exploring a broad array of research questions related to welfare state and social policies in the CEE region.

Journal of Social Policy Issues: Cfp on Special Issue “Welfare state and social policies in the CEE region: past developments, present challenges and prospects for the future”

Deadline: 30 December 2020

University of Warsaw invites to submit original papers to the special issue of Problemy Polityki Społecznej. Social Policy Issues – a peer-reviewed, OPEN ACCESS journal, published by University of Warsaw.

The planned Special Issue “Welfare state and social policies in the CEE region: past developments, present challenges and prospects for the future” aims to bring together papers exploring a broad array of research questions related to welfare state and social policies in the CEE region, that may touch upon past developments, present challenges as well as future prospects. By CEE region we mean a large group of countries including Albania, Belarus, Bulgaria, Bosnia and Herzegovina, Croatia, Czechia, Estonia, Hungary, Kosovo, Latvia, Lithuania, Montenegro, North Macedonia, Poland, Romania, Serbia, Slovakia, Slovenia, and Ukraine as well as sub-country regions, e.g. east of Germany.

The best paper submitted to this issue will receive an award of 400 euro. Read more

until 25/02/21: HERAS+ Call for Research Grants open

HERAS+ Call for proposals for Research Grants open from 25/11/2020 to 25/02/2021

The ZSI and the Ministry of Education and Science (MES) of Kosovo launch together a call for scientific networking and project cooperation between researchers from public universities and universities of applied sciences in Austria, in Kosovo and the Western Balkan region with special attention to young and early stage researchers.

HERAS+ Call for proposals for Research Grants open from 25/11/20 to 25/02/21

The ZSI and the Ministry of Education and Science (MES) of Kosovo launch together a call for scientific networking and project cooperation between researchers from public universities and universities of applied sciences in Austria, in Kosovo and the Western Balkan region with special attention to young and early stage researchers. The call is part of the project “HERAS+” which is funded by the Austrian Development Agency (ADA) and co-financed by the Ministry of Education and Science (MES). Read more

Closed (7/12/20): Online project presentation: Intra Yugoslav Albanian migration

07/12; 17-18: To the Northwest! Intra Yugoslav Albanian migration (1953-1989)

In this talk, CSEES researchers Rory Archer and Mladen Zobec present the
research project “To the Northwest! Intra Yugoslav Albanian migration
(1953-1989)” funded by the Austrian Science Fund (FWF) which began earlier this year. The research examines the phenomenon of Yugoslav Albanian migration from the Yugoslav south (Kosovo, Macedonia) to the Northern republics of Slovenia and Croatia. Read more

2020 Updated Reviews: on the European Pillar of Social Rights in the Western Balkans

2020 Updated Reviews: on the European Pillar of Social Rights in the Western Balkans

The European Centre updated the existing reviews on the European Pillar of Social Rights in the Western Balkans: Albania, Bosnia & Herzegovina, Kosovo, Montenegro, Republic of North Macedonia, and Serbia. The European Centre had already been engaged as international expert organization in the original reviews prepared in 2018. On behalf of the Regional Cooperation Council, the European Centre team was working with country experts and provided quality assurance to ensure that the reports were of high quality, consistent, clear, accurate, sourced, appropriate and timely. Read or download the six reports for 2020 here.

Report: Kosovo 2020

Report: Kosovo 2020 Report 2020 by the European Commission

The European Commission has published 2020 Enlargement Packagew which contains detailed assessment of the state of play in each candidate country and potential candidate, what has been achieved over the last year, and set out guidelines on reform priorities. Read here

Survey: South-East European local Governments Inpost Covid19 Socio-Economic Recovery

Survey: South-East European local Governments Inpost Covid19 Socio-Economic Recovery by NALAS

Within the BACID programme NALAS and KDZ implemented a study on Covid19. 150 mayors and local government representatives havev been interviewed for this study and reveal the impact of the COVID-19 pandemic on cities and municipalities in South-East Europe. Also good practices and recommendations for the socio-economic recovery on local level are provided. Read more

The European Centre signed the MoU with the Employment Agency of Kosovo (EARK)

K. Leichsenring from the European Centre sign the MoU with D. Haraqia from the Employment Agency of Kosovo.

Our Executive Director, Kai Leichsenring, was delighted to sign the Memorandum of Understanding with Drin Haraqia, Director General of the Employment Agency of Kosovo. Both parties ensure further cooperation in the region. Read more about the CFS of Kosovo.

21-22/11/19: Integrated Case Management challenges and opportunities in the Western Balkans

Sonila Danaj presented research on the integration of employment and social services in the Western Balkans at the 5th Conference, Faculty of Economics of the University of Belgrade, 21-22 November 2019.

Our colleague Sonila Danaj presented research led by the Head of Work and Welfare Unit Anette Scoppeta on the integration of employment and social services in the Western Balkans at the 5th Conference organized by the LSEE Research Network on Social Cohesion in South East Europe in collaboration with EBRD Economic and social inclusion in an age of political uncertainty in South East Europe. The event took place at the Faculty of Economics of the University of Belgrade on the 21-22 November 2019. Read about the project.