Kosovo trade deficit exceeds three billion euros

According to Kosovo Central Bank data (BQK) for 2018, the value of importing foreign products in Kosovo had reached over 3 billion euros, while the export of Kosovo products to countries in the region and Europe was over 350m euros.

Meanwhile, in the recent data of the Kosovo Statistics Agency published in the report “Foreign Trade of Goods in Kosovo”, the export of goods in July 2019 was worth 40.4m euros, while import was worth 336.8m euros.

These figures point to a higher deficit of 5.3 percent in July 2019, in proportion to the same period in 2018.

The trade deficit, according to the CEC, has marked growth year-on-year.

This situation by economic experts and business representatives is considered to be harmful in general for the country's economic development.

Naim Gashi, economics expert, told Radio Free Europe that Kosovo should lower the dependence on Kosovo's economy on import by promoting local productivity.

But, according to him, what is struggling with economic development and the development of local productivity is inequality in the market.

Unfortunately, Kosovo has a high trade deficit exceeding 3 billion euros per year, which means that only 1 with 10 of the import of goods and products coming to Kosovo are covered by exports, where we have the trade balance ratio to the outside world in terms of 1 billion euros. Despite some public schemes to support local production, however, the gap in the high trade deficit with the outside world is deepening steadily, as these schemes are not producing the desired effects due to high-level corruption existing in Kosovo and inequity in the market”, Gashi says.

Kosovo continues to have an uncompetitive production sector. Producers in Kosovo have consistently stressed that they face numerous problems, such as higher taxes on increased value, non-legal economy, difficult financing for businesses, high interest rates, energy instability, non-equal competition.

Gashi stresses that all these problems must be eliminated to improve the trade balance.

The “Businesses in Kosovo, which are related to power, are favoured in the market and usually they receive projects from public funds, while those that invest in labour power and technology capacities, they are actually not competitive in the market due to the success”, Gashi says.

And Kosovo Business Alliance Chairman Agim Sahin tells Radio Free Europe that the high trade deficit is a phenomenon that is struggling to develop and grow in the country.

Kosovo still suffers from the lack of a national document -- a national strategy for economic development -- where one of them would set its own priorities and one of them is to reduce the trade deficit, replacing it with local production. Since the end of the war, Kosovo has had trade deficits with billions of euros. This makes us dependent on import, inflation, and we're constantly the country that exports cash, whether taxpayers, whether budget money or also remittances from the diaspora”, Sahin says.