Kosovo faces many challenges to its economic development. The global financial crisis could not have come at a worst time for Kosovo, affecting it immediately after it declared independence. The political status of Kosovo continues to be a challenge to the foreign direct investment - crucial for a country like Kosovo which lacks capital.

Worryingly, remittances continue to be a lifeline for Kosovo's population.

Kosovo ranks in the 143rd place in the world in terms of GDP per capita, with $2,300 per year (data for 2007). Real GDP growth is estimated to be 5.1% per year. And, inflation is at 5.3% per year. The largest growth in nominal GDP per capita has been between 2006 and 2007, namely 7.6%. (ESK, WA).

Unemployment is considered to be at 43%. The labor market is not capable of absorbing the new entrants yearly, thus the unemployment problem will continue to be a major one for Kosovo. (ESK)

In terms of trade, the current account deficit is calculated to be at 33% of GDP in 2008. Kosovo's main trading partners are the EU countries (47.4% of exports, 36.4% of imports) and the Western Balkan countries (32.5% of exports, 43.9% of imports). Kosovo's chief export destination is Albania (10.6% of exports), and it imports more from Macedonia (18.0%) than any other country. (WB, ESK)