US Department of State estimates that Kosovo protected the financial sector from the impact of COVID-19

The Central Bank of the Republic of Kosovo has welcomed the report of the US Department of State on the investment climate for 2021, which recognizes the developments in the financial sector.

The State Department report estimates that the regulatory system is in compliance with EU directives and international standards. There are no limits beyond normal regulatory requirements regarding capital source, adaptability and the ability of investors.

The report states that the CBK has taken all necessary measures to improve policies for the free flow of financial resources. It also highlights the continuing improvements in private sector access to credit, while foreign investors can take out loans and open bank accounts

Although according to IMF forecasts the Kosovar economy during 2020 had a decline of 6% due to COVID-19, the banking sector remains well capitalized and profitable.

The report estimates that financial services and bank lending have improved significantly in recent years. In March 2021, non-performing loans are at the level of 2.7%, while interest rates have dropped significantly, from an average of 12.7% in 2012 to an average of 3.1% in March 2021.

 It is also allowed to transfer funds to other foreign markets or foreign-currency conversions, which must be processed in accordance with EU banking procedures.

Kosovo does not apply any type of capital controls or limitations on international capital flows and as such, access to foreign exchange for investment remittances is fully liberalized.

Despite the shocks from COVID-19 in all world economies, in 2020 remittances in Kosovo were stable and marked an increase of 15.1% or over 1.2 billion dollars.

Regarding economic growth for 2021, the US State Department states that most international financial institutions predict that Kosovo’s economy is expected to grow between 3.5% and 4.5%.

More details about the Report can be found in the following link: https://www.state.gov/reports/2021-investment-climate-statements/kosovo/