This paper intends to analyse the impact of global economic crisis on the economy of Kosovo with the focus on the impact of
crisis on financial system of the country. For the purpose of analysing the global crisis impact on specific sectors of the
economy of Kosovo, this paper begins by explain the roots of the global crisis, and the impact of the crisis in the region of
Western Balkan by identifying and analysing fluctuations of major macroeconomic indicator of the economy, which is the GDP
of Kosovo and Western Balkan countries for comparative analysis. In this regard the paper furthermore analyses the trends of
macroeconomics indicators that reflect the development and macroeconomic balances of Kosovo economy in period of 2007-
2012, such as GDP, Trade Balance, CPI, Unemployment Rates, Remittances, and FDI. Furthermore, specifically analysis the
reflection of global crisis in financial system by analysing the main developments of banking sector and pensions fond as major
pillars of financial system .Additionally this paper by considering reports, academic journals, and different studies in view of
economic development of Kosovo during the global economic crisis, presents applied fiscal policies of government during that
period and the respond of financial system itself toward crisis.