are the poorest in Europe with an average
annual per capita income of only $1800 - about one-third the level
of neighboring Albania. Unemployment - at more than 40% of the
population - is a severe problem that encourages outward migration.
Most of Kosovo's population lives in rural towns outside of the
capital, Pristina. Inefficient, near-subsistence farming is common -
the result of small plots, limited mechanization, and lack of
technical expertise. Economic growth is largely driven by the
private sector - mostly small-scale retail businesses. With
international assistance, Kosovo has been able to privatize 50% of
its state-owned enterprises (SOEs) by number, and over 90% of SOEs
by value. Minerals and metals - including lignite, lead, zinc,
nickel, chrome, aluminum, magnesium, and a wide variety of
construction materials - once formed the backbone of industry, but
output has declined because investment has been insufficient to
replace ageing Eastern Bloc equipment. Technical and financial
problems in the power sector also impedes industrial development.
The US has worked with the World Bank to prepare a commercial tender
for the development of new power generating and mining capacity. The
official currency of Kosovo is the euro, but the Serbian dinar is
also used in the Serb enclaves. Kosovo's tie to the euro has helped
keep inflation low. Kosovo has maintained a budget surplus as a
result of efficient tax collection and inefficient budget execution.
While maintaining ultimate oversight, UNMIK continues to work with
the EU and with Kosovo's government to accelerate economic growth,
lower unemployment, and attract foreign investment. In order to help
integrate Kosovo into regional economic structures, UNMIK signed (on
behalf of Kosovo) its accession to the Central Europe Free Trade
Area (CEFTA) in 2006. In February 2008, UNMIK also represented
Kosovo at the newly established Regional Cooperation Council (RCC).

GDP (purchasing power parity):

$4 billion (2007 est.)

GDP (official exchange rate):

$3.237 billion (2007 est.)

GDP - real growth rate:

2.6% (2007 est.)

GDP - per capita (PPP):

$1,800 (2007 est.)

GDP - composition by sector:

agriculture: 20%
industry: 20%
services: 60% (2007 est.)

Labor force:

832,000 (June 2007 est.)

Labor force - by occupation:

agriculture: 21.4%
industry: NA
services: NA (2006 est,)

Unemployment rate:

43% (2007 est.)

Population