Reflections of the Global Financial Crisis and the Performance of Macro-Economic Development in Kosovo

Abstract

While it is argued that the global financial crisis have not directly hit Kosovo, however, its economy has felt its indirect effects. Kosovo's economy in 2012 has been increased, but the growth rate was lower compared to previous years. The slowdown in economic progress has been caused due to global economic developments. This is because foreign direct investments and exports declined more pronounced in 2012, while imports also were characterized by slower growth. It should also be noted that increased public investments and remittances have had a tremendous contribution to economic activity. In the context of slow economic growth in recent years and fiscal pressures, Kosovo is faced with the complex challenge of unemployment, which still remains at a high level. The demand for labor is still very low and establishment of a favorable environment that would create sustainable jobs will be a challenging task that requires reforms in the economic policy. Hence, this paper addresses one of the deepest challenges of Kosovo that is domestic economic capacity to generate economic growth. By analyzing the economic factors affecting economic development, this paper identifies barriers and though discusses real opportunities for a better economic growth pattern to finally highlight the recommendations.

DOI: 10.5901/ajis.2013.v2n9p310