Marketopportunities for Finnish companies in Kosovo
Education, healthcare, defense procurement, energy sector and digitalization - excellent market opportunities for Finnish companies.
The corona pandemic and inflation during 2022 has weakened Kosovo's economy. Main challenges faced in the country are unemployment, emigration, import dependence and energy supply in winter. Kosovo is dependent on imports, e.g. for electricity, oil, wheat and corn as well as other goods. In 2022 Kosovo exported goods worth 920 million and 405 thousand euros, while its import was 5 billion 639 million 393 thousand euros, thus registering a trade deficit in the amount of 4 billion 718 million 989 thousand euros. Kosovo mainly imports goods from CEFTA- countries such as Albania and Serbia and EU’s German speaking countries.
Despite the challenges, the business environment is improving and the EU's economic and investment plan for the Western Balkans will make available nearly 30 billion euros in funding for the region, thus increasing the opportunities for Finnish companies.
Marketopportunities for Finnish companies in Kosovo
According to the World Bank, Kosovo's GDP is estimated to grow by approximately 3.1% in 2022 (estimated growth for 2023 is 3.7%). The significant additional funding allocated to the priority areas (education, health care, defense procurement and digitalization) defined in Kosovo's 2023 budget offers opportunities for Finnish companies. There is also plenty of potential in the energy sector and cyber security sector. The EU's Western Balkans investment package still offers a great potential opportunity for Finnish companies.
The corona pandemic weakened Kosovo's economy, and now the problems continue as challenges, e.g. regarding unemployment, emigration, import dependence, rising inflation and energy supply. The prices of raw materials and commodities have risen considerably. Kosovo is dependent on imports, e.g. for electricity, oil, wheat and corn.
Kosovo's budget for 2023 is record high, around 3.22 billion euros. The budget allocates significant additional funding to education, health care, defense procurement and digitalization. The development of the energy sector is a key challenge for Kosovo. These sectors also offer excellent opportunities for Finnish companies.
In the EU's economic and investment plan for the Western Balkans, an ambitious investment package is presented, which will make available nearly 30 billion euros in funding for the region. The package includes EUR 9 billion in aid funding from the IPA III instrument and a maximum of EUR 20 billion in investments through the new Western Balkans guarantee facility.
The most important sectors of the economic and investment plan are sustainable transport, clean energy, environment and climate, digital future, private sector and human capital. These are also areas, where Finnish companies have a lot of expertise. In Kosovo, the still ongoing construction boom offers opportunities for things like elevators, cranes and garbage containers. In addition to these, for example, renewable energy and cyber security offer interesting opportunities for Finnish companies.
Kosovo's main imports are minerals, food and beverage products, machinery and electrical components, vehicles, chemical products, plastic and rubber products, agricultural products, textiles and live animals.
Finland is home to a significant Kosovar community of about ten thousand people.
Text: Matti Nissinen, Ambassador of Finland to Kosovo