BB: Kosovo with the fastest economic growth in region slows down in employment

Kosovo is the fastest developing country in the region, with 4.2 percent of economic growth this year, while growth is projected to reach 4.5 percent in the period 2019-2020, but the outlook is vulnerable to external and domestic risks.

So said senior World Bank Office officials in Kosovo, at the news conference during the presentation of the World Bank Economic Rule Report for the Western Balkans.

According to the report, growth for the Western Balkan region is said to be estimated to consolidate at 3.5 percent by 2018, according to the Western Balkans Economic Rule Report, higher but fragile growth.

According to estimates, Albania, Bosnia and Herzegovina, Kosovo, Macedonia, Montenegro and Serbia marked increases of between 2.5 and 4 percent.

For this year in Kosovo, private investments have seen growth, while foreign investments have seen decline.

Asli Senkal, economist at the World Bank's Office for Kosovo, has said that Kosovo has the lowest public debt in the region, but is on a rapid rise. She added that the fiscal deficit is projected to expand due to high public investments in road infrastructure.

Kosovo is the fastest growing country in the region and is expected to continue with a growth rate of 4.2% to 2018, much like last year. The fiscal deficit is projected to expand due to high public investments, mainly in infrastructure and due to budgetary spending on social protection higher than expected. However, the fiscal deficit will remain in fiscal order. The increase is projected to reach 4.5%<1>, Sincal said.

And in terms of unemployment, she has said that unemployment is about 30 percent based on official data. Senka pointed out that job creation has slowed compared to 2017.

“As far as employment is concerned, the performance of the labour market similar to that of the region has weakened in 2018. If we look at the graph, we can see that it's too weak to be in 2017. So in 2017, Kosovo has added more than 20,000 jobs, and during this time there have been more people who have become part of the labour market. This has led to increased employment and unemployment in 2017. Dynamis have changed in the first half of 2018. In the first two months, job creation slowed down, resulting in negative creation of new jobs compared to the same period of next year”, Sinkal has declared.

However, the financial crisis warned in international markets may affect Kosovo, but the senior official at the World Bank Office, Diego Garrido Martin, has asked the Government to work to reduce the eventual crisis.

“We see risks in the external environment, and these risks relate to the expected constraints in financial markets, as well as the normalisation of monitoring policy in both the US and Europe. This means that the interest rate has increased in the United States last week and that will naturally have its effect on the economies of developed countries. The Western Balkan countries, which are related to the rest of the world, are small and open economies and, of course, benefit from positive developments in the rest of the world. This means that governments must work hard to reduce some of these risks that may affect their domestic economies”, Martini has said.

While asked by the media for the energy project “the new Kosovo”, where the World Bank is involved, Martini has declined to comment, saying the Government of Kosovo is responsible for this project.