Kosovo ended 2025 in deep political uncertainty, holding a snap parliamentary election on Dec. 28 after nearly a year of deadlock that stalled government formation, delayed crucial reforms and left the economy under pressure.
The early vote was called after Prime Minister Albin Kurti’s Vetevendosje (Self-Determination) party, which won the February 2025 election, failed to form a governing coalition despite securing the most seats in parliament. Persistent divisions meant lawmakers could not elect a speaker or approve a government, prompting the dissolution of the legislature and a fresh ballot in a bid to break the impasse.
Kosovo’s political standstill has chipped away at economic momentum, with unemployment above 25 per cent and around one‑fifth of the population living below the poverty line, according to local reports. The inability to pass a 2026 budget has hindered economic planning and stalled key reforms in justice and public administration.
Relations with the European Union have been a central issue. Brussels has begun lifting restrictive measures imposed in 2023 over tensions in northern Kosovo, announcing plans to release frozen financial assistance in exchange for progress on dialogue and normalisation with Serbia, European Commission President Ursula von der Leyen said this month.
But EU demands for implementation of agreements — including establishment of an Association/Community of Serb‑Majority Municipalities and reduced tensions in the north — remain unmet, complicating Kosovo’s accession path. European lawmakers have urged Pristina to accelerate reforms in rule of law, public administration and media freedom to sustain progress toward EU integration.
The United States has also flagged concerns about Kosovo’s political direction, suspending its strategic dialogue with Pristina due to actions by the caretaker government that Washington said undermined cooperation.
Economically, Kosovo’s growth has been mixed. Official figures suggest some expansion, but analysts warn that real inflation and heavy reliance on imports complicate prospects for sustained improvement. Energy market liberalisation and business power supply disputes added to commercial pressures earlier in the year.
The snap ballot is widely seen as pivotal for whether Kosovo can move beyond prolonged paralysis that has delayed budget laws, withheld vital EU and World Bank funding worth hundreds of millions of euros, and frustrated efforts to implement reforms critical to its Western integration.
As 2026 begins, Kosovo faces the challenge of forming a stable government capable of restoring investor confidence, advancing EU dialogue and responding to persistent socio‑economic challenges, including high unemployment and youth emigration.