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PRESS RELEASE April 9, 2020

Kosovo: Health Systems, Safety Nets, and Support to Businesses All Critical to Protecting Lives and Livelihoods

The World Bank is finalizing a program of activities to help Kosovo manage and mitigate the impact of the crisis

WASHINGTON, 8 April 2020 – Decisive policy measures that prioritize investments in health care systems and provide safety nets for people, especially the most vulnerable, are critical to mitigating the impacts of the COVID-19 (Coronavirus) pandemic in Europe and Central Asia, says the Spring 2020 Economic Update for the region.

In addition, countries in the region can help sustain economic activity by supporting the private sector with temporary business credits, tax cuts, or tax payment deferrals. Small and medium enterprises that are impacted could benefit significantly from targeted government subsidies.

“During these exceptionally difficult times, it is imperative for policymakers to act decisively,” says Cyril Muller, World Bank Vice President for Europe and Central Asia. “This means moving rapidly to strengthen health systems and social safety nets, supporting the private sector, and preserving financial stability and confidence — all critical to people’s lives.”

Projections of the economic implications of COVID-19 are subject to significant uncertainty. Therefore, the report produces simulation exercises to illustrate the range of growth outcomes that may materialize as a result of the pandemic. *Scenarios suggest regional growth will fall into a recession in 2020, contracting to between −4.4 and −2.8 percent, held back by the coronavirus pandemic, before rebounding in 2021 as policy measures are introduced, global commodity prices gradually recover, and trade strengthens.

“Social distancing and closing of non-essential businesses and schools are necessary measures to contain the spread of the pandemic and save lives,” says Asli Demirgüç-Kunt, World Bank Chief Economist for Europe and Central Asia. “At the same time, policies must seek to minimize the economic costs of these measures and ensure the recovery is quick rather than prolonged, once the pandemic is over.”

Supportive measures such as cash transfers or healthcare subsidies, to help vulnerable people and families, and temporary business credit, and tax breaks to businesses will be critical to cushion the downturn and preserve jobs, says the report.

The COVID-19 pandemic is occurring at an already fragile time for the region. Growth in the emerging market and developing economies of Europe and Central Asia decelerated to 2.2 percent in 2019. Since February, the region has faced an increasingly uphill battle to cope with both the immediate health crisis and the long-term challenges brought about by the global pandemic.

The World Bank Group is taking broad, fast action to help developing countries strengthen their pandemic response, increase disease surveillance, improve public health interventions, and help the private sector continue to operate and sustain jobs. It is deploying up to $160 billion in financial support over the next 15 months to help countries protect the poor and vulnerable, support businesses, and bolster economic recovery.


For Kosovo, the report projects that – similarly to other countries in the region - the economy will experience a contraction in 2020**, even if containment measures were lifted during the second quarter of the year. In addition to the temporary shut-down of key economic activities and the related income loss, the impact of the outbreak in Kosovo will primarily be associated with lower diaspora-driven exports of services, informal remittances, and FDI in residential construction; but the economy is expected to recover in 2021.

However, if the outbreak persists beyond the second quarter of 2020, the impact of COVID-19 will more severely affect the supply side of the economy, leading to long-lasting losses in jobs and production.  

The World Bank is finalizing a program of activities to help Kosovo manage and mitigate the impact of the crisis, including a new fast-track project to respond to urgent health sector priorities and  protect the income of households; a restructuring of already approved projects to mobilize funds in support of SMEs; and finally a development policy loan operation to support economic recovery and help finance the budget. Collectively, these programs are likely to exceed EUR 120 million.

*The scenarios in the report are based on data as of March 20, 2020.

** The magnitude of the contraction is subject to continuous updates of the administrative data and national accounts.



Carl Hanlon
+1 (202) 460-8526