Kurti: Economic damage from pandemic could total over 600m euros

The incumbent Prime Minister, Albin Kurti, has said that the economic crisis as a result of the choreography seems inevitable. The health crisis has called it unpredictable and unnecessary and unreasonable, but planned policy.

During a virtual forum organised by the American Economic Oda to discuss the management of Covid-19 on the part of Kosovo institutions, Kurti has made an analogy between the health and economic crisis. According to him, Kosovo has been more counterproductive than other countries because “cris not double, but triple”.

In order to preserve public health, countries around the world have introduced the economy into sanitation. As a result, economic activity has declined, with what the income has lost. Offering and applying have also experienced a negative friend. So there is less work, less production, less profit, less exchange and less expense. Aware that the state of the economy in hibernation could deteriorate, countries worldwide have used two tools: they have used fiscal policies and monetary policies. In this respect we have been challenged because we can only use fiscal policies not even monetary ones. But we've been twice as engaged since on the other side the crisis in us is not double but triple: it's not only health and economics, it's political as well. The health crisis was unpredictable. The economic crisis is looking inevitable. While this policy was both unnecessary and unreasonable, since it was planned it became inevitable. We have entered the critical phase of the health crisis, but I am convinced it will be well managed by the Ministry of Health and the National Institute of Public Health”, Kurti said, according to the government's announcement in office. We need their scientific expertise, and they need our cooperation unconditionally. I assure you that the unnecessary political crisis will not stop me from being acting Prime Minister, and, as the Government in office, fulfilling our task of restoring the economy. So let's wake him up from the hibernation and make him stronger than when he was in. I'm grateful for all entrepreneurs for their co-operation and I'm sure he'll continue to grow between us”.

Kurt has repeated the message for citizens to listen to doctors, stay at home and maintain hygiene “because that's how we cut back the time it will take for economic recovery”.

He has also said that as a government, it has been held accountable for the time of recovery, but has added that despite optimism, there will again be losses.

So that the state of economy in hibernation does not deteriorate, we've taken the first step by preparing the Fiscal Emergency Package. In case we have allocated some 190m euros to minimize the damage to the crisis. But it should be realized that this amount is not the economic cost of the package. Because it does not involve the cost of opportunity. And, as an entrepreneur, you know that the cost of opportunity plays a determining role in economic assessments before making any decision. As economic activities decline, so will the government's revenues. And if we anticipate that we're going to generate about 200 million euros less in revenues, then that's the cost of the opportunity we have to include. Consequently, the package's economic cost is about 390m euros. I'm highlighting this so that we don't leave room for misinformation and abuses that have attempted to be made by those who our economy had just destroyed without any pandemic”, Kurt added.

Kurti has said that the second step to recovery will be to design the Pack of recovery.

He has remembered that economic growth was preceded between 4 and 4.2 percent, while now economic damage may range from nearly 400m euros to 650m euros.

We remember that economic growth according to the International Monetary Fund prior to the spread of pandemic was envisioned 4%, meanwhile, according to the World Bank of 4.2%. The real impact on the economy will be known only after the pandemic is completed. But the extra estimates we now have range from the most optimistic forecast, where GDP marks annual decline of 1.6% (World Bank), up to the most pessimistic one, where GDP marks annual decline of 5% (International Monetary Fund). The IMF, therefore, also envisioned a smaller growth, and now a greater decline - the World Bank saw a greater increase now in less decline. According to these parameters, the damage in our economy could range from about 392m to about 645m euros. So, always counting on the economic cost on the predictions I mentioned”, the prime minister in office has further said.

Kurti has said that the “economic crisis is also seen as a case for progress”, adding that “subventions and loans for your companies will not only be to ensure liquidity. They will be to expand the activity, boost increased export production. So investment, subsidies and loans, for employment, production and export”.