The correlation between savings and economic growth has been the subject of research for some well-known economists. This study provides further insight on such correlation by examining the case of Kosovo from both a qualitative and quantitative research methodology. The data used was from 2010 to 2017 and has been analyzed using the augmented Dickey-Fuller tests, Johansen cointegration tests, and Ganger causality test. The test of the unit root confirms stationarity, and the regression results showed that deposits have a significant positive impact on Kosovo’s economic growth, because savings stimulate investment, production, and employment and consequently generate greater sustainable economic growth. Furthermore, loans and remittances also help boost the economy of Kosovo through their direct impact on investment. This paper confirms that countries whose national savings rate is high are not dependent on foreign direct investment; consequently, the risk arising from volatile foreign direct investment decreases significantly.

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The main problem for developing countries is the lack of investment, which consequently limits the country's economic growth. Developing the real sector of any economy is not an issue that should be left to random actors. So, the Government of Kosovo, Bank of Kosovo and Commercial Banks are the three main actors that should be focused on factors that influence the growth of the level of domestic savings. By channeling savings into Kosovo's economy through banks for investments in healthy financial capital, Kosovo becomes economically and politically more developed and independent. This paper based on literature analyses and data processing identifies some of the factors that could affect the growth of savings in Kosovo, as these will lead to higher level of financial capital for entrepreneurs and the continuity of the country's economic growth. Taxation and income levels, demographic variables, confidence and deposit security, banking network, state-owned bank, financial education and financial inclusion are among the key factors of increasing savings. The interest rate is also important factor, but since this factor is often subject of other papers, we did not incorporate it in this paper.

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