IMF official: Taxes Saw the Fight Even Kosovars

Press conferences at the conclusion of the mission include statements by IMF staff teams conveying preliminary findings after the visit to the country. As a media report states, the thoughts expressed in this statement are of the IMF staff and do not necessarily represent the thoughts of the IMF Executive Board.

“This mission will not result in discussions on the Board”, said the announcement

Eble, also says the tariff on imports from Serbia and Bosnia and Herzegovina has increased consumer prices, especially food products, thus affecting lower-income family economies, as well as weakening the external current account

· The growth continues to be strong, but greater growth is needed, driven by the private sector and exports, to reduce high unemployment and the wide income gap with counterparts countries.

· Recent policy initiatives could increase current spending, hinder private sector development and weaken the investment climate.

Instead, policies should focus on advancing structural reforms to close significant gaps in human and physical capital by investing in education, health and infrastructure, as well as strengthening governance and the business environment.

“The main challenge for Kosovo's economy is the highest growth driven by the private sector and exports. While the forecasting that growth will continue stable by about 4 percent this year is not enough to alleviate unemployment and accelerate income convergence with the rest of Europe. Also, the tariff on imports from Serbia and Bosnia and Herzegovina has increased consumer prices, namely food products, thus affecting lower-income family economies as well as weakening the external current account. The execution of the budget is generally on track, while the lowest level of revenue collection and spending on pension benefits schemes, again, is expected to be compensated for at lower capital expenditures”, Able said in a statement after the visit to Pristina.

“While Kosovo has managed to maintain macro-friendly stability, a number of costly policy initiatives could hinder private sector development. In particular, high wage increases as part of public administration reform, combined with an increase in employment, represent high fiscal costs, which, without container measures, endanger fiscal order and undermine competitiveness. Similarly, the social benefits under discussion, such as early retirement for police or the generous benefits of parental rest, as well as the proposed minimum wage increase that would go beyond price development, productivity and wage developments, carry considerable fiscal costs. They can also curb private sector development by presenting obstacles to unemployment and informality efforts,”, followed.

Eble says that instead, authorities must advance with the restructuring of public enterprises, improve the implementation of quality investments and financed by donors, as well as accelerate educational reforms; strengthen rule of law and business environment; and advance with delayed war veterans' reforms to free budget space for increased spending.

“also, government guarantees should be carefully revised so that fiscal sustainability” is not jeopardised, Eble concludes.