The Office of Economic and Commercial Affairs of the Italian Embassy in Pristina coordinates economic promotion activities in Kosovo with the aim of increasing trade, investment flows and technological cooperation between the two countries. The Office provides information, assistance and services to Italian companies and economic operators operating or planning to operate in Kosovo, as well as to local companies wishing to operate in Italy. This happens in coordination with the Italian Trade Agency – ICE office in Tirana, which also covers the territory of Kosovo.
GENERAL FRAMEWORK
Since its declaration of independence in 2008, Kosovo has made significant progress in adopting and implementing market-oriented policies and regulations. The country has also taken several measures to improve its business environment. Particularly in recent years, promoting trade and business and attracting foreign investment have become key priorities for Kosovo.
Kosovo is a member of the Central European Free Trade Agreement – CEFTA, the World Bank and the International Monetary Fund, as well as of the European Bank for Reconstruction and Development, which is particularly active in the country’s infrastructure development. The entry into force of the Stabilisation and Association Agreement between Kosovo and the European Union in 2016 was a major turning point for profitable business with this country.
In particular, the Stabilisation and Association Agreement provides for:
- gradual liberalisation of trade between Kosovo and the EU, with the aim of establishing a free trade area;
- approximation of Kosovo’s legislation to that of the European Union in areas such as competition, public procurement and intellectual property rights;
- enhancing of the cooperation in key areas such as energy, transport, environment, justice and home affairs;
- EU financial and technical assistance to help Kosovo implement the necessary reforms.
The prospect of EU membership represents a strong incentive for Kosovo to continue on the path of democratic and market reforms. It is an important incentive to consolidate the rule of law, improve the investment climate and strengthen the country’s economic competitiveness. Despite Kosovo’s small size, with a population of 1.58 million, the country offers a number of potential competitive advantages for investment and economic activity. These include:
- geographical proximity to Italy and the European markets, with an infrastructure that is constantly improving thanks to major investments also in recent years;
- the use of the euro as the official currency, an element of stability and trade facilitation;
- favourable legislation and tax regime for foreign investment;
- low labour costs, with an average gross monthly wage of EUR 521, falling to EUR 473 in the private sector.
These factors make Kosovo an attractive destination for Italian and European companies wishing to expand their activities in a developing economic environment with good growth prospects.
MACROECONOMIC FRAMEWORK AND TRADE
According to data published by the Kosovo Agency of Statistics (ASK), the country’s economy continued to grow in 2025. In the second quarter of 2025, real GDP growth reached 4.58%, slightly higher than the 4.32% recorded in the same period of 2024.
For 2026, both the International Monetary Fund and the World Bank forecast real GDP growth of 3.8% and 3.9% respectively, with growth expected to stabilize at around 4% in the medium term.
According to ASK, the inflation rate fell to 1.6% in 2024, compared with 4.9% in 2023 and 11.6% in 2022. However, a temporary increase was recorded in December 2025, when inflation reached 5.3%. Meanwhile, the unemployment rate stood at 10.8%, remaining broadly stable compared to the previous year.
Kosovo’s economy is highly open to international trade, with total trade flows approaching €8 billion in 2025.
Based on our analysis of the provisional monthly data released by the Kosovo Agency of Statistics for December 2025, total trade between Italy and Kosovo exceeded €398 million (about €28.9 million in imports and €369.4 million in Italian exports to Kosovo). Italy ranks as Kosovo’s fourth-largest supplier, with a market share of about 5.2%, after Germany (14.3%), Turkey (13.3%), and China (13.1%). It is followed by North Macedonia (5%), Albania (4.1%), and Greece (3.9%).
Italy is also the eighth-largest destination market for Kosovo’s exports, accounting for 3.1% of total exports. The main export destinations during the same period were Albania (17%), North Macedonia (14.7%), Germany (11.4%), and Switzerland (10.5%).
The increase in total Italy–Kosovo trade (+8.15% compared with 2024) is entirely due to the growth of Italian exports (+11.64%), while Kosovo’s exports to Italy declined significantly (-22.74%).
Regarding the sectors with the highest trade exchange, Italian exports are dominated by food products, beverages and tobacco, which account for about 31%, followed by machinery and equipment (15%). On the other hand, rubber and plastic products as well as chemical substances and products represent the main categories of Kosovo’s exports to Italy.
OPPORTUNITIES
As an emerging country, Kosovo offers a range of investment opportunities in energy, agriculture and agro-industry, mining, infrastructure and information and communication technology, while the sectors with the greatest potential in manufacturing are woodworking, textiles-clothing and leather goods.
Franchising is another area of opportunity, as evidenced by the continuous increase in the number of Italian and international brands present here.
These figures highlight the diversification and dynamism of Kosovo’s economy, which offers foreign investors a good range of opportunities to focus on in order to take advantage of the country’s growth potential.
(Updated on 12.03.2026)