Open Data Albania has conducted a research work on the evolution of GDP and inflation rate in the last years in Kosovo, based on data provided from the Central Bank of the Republic of Kosovo and the IMF.
In the last years the nominal GDP has changed as shown in the following graph:
Source: The Central Bank of the Republic of Kosovo, IMF
Comments and Analysis: ODA
As it can be seen from the graph, the nominal GDP in Kosovo has been increasing, and the highest value is attained in 2010, about EUR 4,113 million (IMF estimates), or 6.3% higher than the previous year. However, the data show that the real growth rate of Kosovo’s economy during 2010 was 4.6%, and therefore we can conclude that a part of the nominal GDP growth came from an increase of the general prices in the country.
Regarding the inflation rate, it has changed as shown in the following graph:
Source: The Central Bank of the Republic of Kosovo, IMF
Comments and Analysis: ODA
In 2007 the inflation rate attained its highest level over the past decade: 10.5%. Meanwhile in 2004 the country has experienced a deflation period, prices for the consumer’s basket fell by 3.7%. During 2010, the inflation rate is estimated to be 3.1%, while in 2009 the prices did not rise significantly.
Inflation seems to be an important problem in Kosovo, as the fluctuations during the last ten years have been significant. The volatility of the inflation rate harms the economy, because it does not allow individuals’ stable expectations on the general prices level, which can lead to suboptimal decisions regarding their savings and investments. Generally, a stable inflation rate, is desirable, in order for the economy to gradually develop.
All the information is presented in the table below:
Source: The Central Bank of the Republic of Kosovo, IMF
Comments and Analysis: ODA