The Central Bank of the Republic of Kosovo has published the 21st Financial Stability Report, providing its latest assessment of risks, challenges and the outlook for Kosovo’s financial system. The report concludes that the financial system remains resilient and stable, while noting continued exposure to global economic uncertainty. Kosovo’s economy grew by 4.4% in 2024 and annual inflation fell to 1.6%, mainly due to lower food and imported goods prices; for 2025, the central bank forecasts 4.1% growth and average inflation of 3.3%. The fiscal position is described as stable with a minimal deficit and a declining public debt-to-GDP ratio, while the widening current account deficit and trends in remittances and foreign direct investment are highlighted as structural challenges. The financial system continued to expand in 2024, with bank credit rising by 18.3% driven by strong household and business demand and improved lending conditions; financial soundness indicators remained within regulatory requirements, and stress tests under adverse scenarios show the banking sector is resilient due to adequate capitalisation and liquidity, supported by private-sector deposit growth. The report reiterates that the Central Bank’s macroprudential policy remains a key tool and that it will continue to closely monitor economic and financial developments and take measures as needed to preserve financial stability.

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