Kosovo trade deficit reaches 6 billion euros, economists warn deep crisis

Kosovo Statistics Agency (ASK) data speaks of a further deepening gap between import and export, while economists warn of serious consequences if the government does not change the economic course.

University economics professor Meday Hashan, in an interview for Online Economics, sees the situation as a direct result of lack of support for local producers and poor attracting foreign investment.

It calls government economic policies harmful to the country's long-term development, stressing that the lack of a clear strategy for the production industry and failure to build a competitive environment for local businesses has brought Kosovo to this alarming state.

“Arsyet of the trade deficit is due to the economic growth of import at the country level, because we in Kosovo's economy have an extremely negative trade balance from the beginning, but the negative trade balance in 2017 has been about 6 billion euros and this 6 billion has come due to the non-subvention of production businesses on the part of the Government of Kosovo, the failure to create a climate for foreign investment. We at the level of the country should be instructed to attract foreign investors, increase production and products, which are imported at the overall level to replace with local products. This is a very wrong policy applied by the Government of Kosovo, and the lack of subsidisation of production companies has caused a high level of import. We also have a global increase in financial prices, and this has greatly impacted us with a high trade deficit, and this deficit is continuing in 2025. These are some of the factors that have influenced us to have a negative trade balance”, he said.

Hashan thinks the lack of local production and weakening export capacities have created a dangerous economic spiral. He notes that exports to the United States have declined significantly.

We've had exporters earlier, which if we just take the export part with the US we've had exporters that exported to the U.S. and from above, as has been somewhere, about 200 million. Export to the US is now around 20 million. This shows that unless any production companies have been subsidised, it has been hampered by the development of the product in Kosovo and export growth. So a government, which doesn't have a clear program for the country's economic development, creates such a situation, because if you don't have production and export, which was done earlier, not that it was supported, but it was hampered and influenced to have a very low export level, as is about 14.8 percent in relation to the import that has higher turnout than exports. These are some of the factors that have hampered development”, he said.

The situation, according to Hashan, has deteriorated even more after the liberalisation of the energy market, starting on June 1st of this year. The high cost of energy, according to him, has caused production companies to curb activity.

“Now we are in a new economic situation, when on June 1st the liberalisation of the energy market and these production companies, which are part of 14.8 per cent, which have been exported, according to information from Kosovo's economic interests, representing these production businesses, they have only stabilised production due to high energy costs. It is expected that during 2025 if no government steps are taken to eliminate this barrier that has caused us to increase unemployment due to the failure of production in Kosovo”, Hashani told EO. / EO/ Periscope.