Economy - overview: Over the past few years Kosovo's economy has shown significant progress in transitioning to a market-based system and maintaining macroeconomic stability, but it is still highly dependent on the international community and the diaspora for financial and technical assistance. Remittances from the diaspora - located mainly in Germany, Switzerland, and the Nordic countries - are estimated to account for about 14% of GDP, and donor-financed activities and aid for approximately 10%. Kosovo's citizens are the poorest in Europe with an average annual per capita income (PPP) of $7,400. Unemployment, around 45%, is a significant problem that encourages outward migration and a significant informal, unreported economy. 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. With international assistance, Kosovo has been able to privatize a majority of its state-owned-enterprises. 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 of ageing equipment and insufficient investment. A limited and unreliable electricity supply due to technical and financial problems is a major impediment to economic development, but Kosovo has received technical assistance to help improve accounting and controls and, in 2012, privatized its distribution network. The US Government is cooperating with the Ministry for Energy and Mines and the World Bank to prepare commercial tenders for the construction of a new power plant, rehabilitation of an old plant, and the development of a coal mine that could supply both. In July 2008, Kosovo received pledges of $1.9 billion from 37 countries in support of its reform priorities, but the global financial crisis has limited this assistance and also negatively affected remittance inflows. In June 2009, Kosovo joined the World Bank and International Monetary Fund, and Kosovo began servicing its share of the former Yugoslavia's debt. 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. Serbia and Bosnia previously had refused to recognize Kosovo's customs stamp or extend reduced tariff privileges for Kosovo products under CEFTA, but both countries resumed trade with Kosovo in 2011. The official currency of Kosovo is the euro, but the Serbian dinar is also used illegally in Serb enclaves. Kosovo's tie to the euro has helped keep core inflation low. Kosovo maintained a budget surplus until 2011, when government expenditures climbed sharply.

GDP (purchasing power parity):
$13.56 billion (2012 est.)
country comparison to the world: 144