FDI FLUCTUATIONS FOLLOWED BY GDP FLUCTUATIONS IN KOSOVO AND FAVORING PARTICULAR SECTORS OF THE ECONOMY

Abstract

This paper examines the main trends of FDI (Foreign Direct Investment) in Kosovo. Kosovo as a country that had just emerged from war in 1999, with frequent changes of laws and adoption of economic liberalization measures made very large strides in democracy and international recognition of statehood. Fluctuations of FDI in Kosovo in the past 12 years link these directly in the two macroeconomic indicators clearly express how important is the stability of the country. GDP growth rate in Kosovo with a great opportunity for investors, one more chance for the local population to find a new job. The perception of investors that there is no risk to invest in Kosovo increased FDI flows. Success of Kosovo to boost foreign investment becomes accessible if not delayed accession to the EU. All these factors have led to a satisfactory level of the FDI in Kosovo, but economic and political context is crucial. Kosovo has significant structural mismatch economy compared to countries in the region. This information allows us to create a more favorable institutional framework for investment, facilitates an investor to take a decision to invest quickly. From an investment perspective in Kosovo economic structure, trends seen that capital to invest in some sectors. Investments in the industrial sector (manufacturing) in mining, energy, construction, trade and services have been attractive to foreign investors.