Central Bank of the Republic of Kosovo Publishes Financial Stability Report No. 21

The Central Bank of the Republic of Kosovo (CBK) has published the 21st edition of the Financial Stability Report (FSR), which provides a detailed, evidence-based assessment of the latest developments in the country’s financial system, the challenges it faces, and the outlook for the coming period.

The report confirms the resilience and stability of Kosovo’s financial system, its prudent regulatory supervision, and effective risk management practices. However, these achievements remain exposed to global economic uncertainties, requiring continued vigilance.

Kosovo’s economy grew by 4.4% in 2024, supported by private consumption, investments, and exports. The annual inflation rate dropped to 1.6%, mainly as a result of declining prices for food and imported goods. For 2025, the CBK forecasts economic growth of 4.1% and an average inflation rate of 3.3%, driven primarily by private consumption and investments.

The fiscal sector recorded stable performance, with a minimal deficit and a reduction in the public debt-to-GDP ratio. However, the widening of the current account deficit, along with trends in remittances and foreign direct investments, remain structural challenges that require increased attention and monitoring.

Kosovo’s financial system continued to expand in 2024, strengthening its role in supporting the domestic economy. The banking sector recorded rapid credit growth of 18.3%, driven by strong demand for financing from households and businesses, as well as improved lending conditions.

Financial soundness indicators remain within regulatory requirements. Stress test results, even under adverse scenarios, show that the banking sector is resilient to macroeconomic and financial shocks, as a result of adequate capitalization and liquidity, as stipulated in the CBK’s legal and regulatory framework. Liquidity remains at stable levels, supported by an increase in private sector deposits.

The CBK’s macroprudential policy remains an important instrument, focused on preserving the stability of the financial system against internal and external shocks. The CBK will continue to closely monitor economic and financial developments, taking necessary measures to safeguard financial stability and support the country’s sustainable economic development.

This report represents an important contribution to fulfilling the CBK’s mandate to preserve financial stability, enhance transparency, inform the public, and encourage professional debate on issues of importance to the country’s economy and financial system.

The full report is available on the CBK’s official website.