Pandemia suspends new capital projects in Kosovo, economic recovery difficult

The overall value of new capital projects this year is 122.8m euros, officials of the Ministry's duty of Finance and Transfers Radio Europe have announced. Of the total value, over 51.3m euros were earmarked for the central level, while 71.5 for the municipal level.

Some of the new projects, which are envisioned in this year's Board Law, include building the bridge on N9 National Road, the Pay-Red segment, health system support programmes, building the children's nest in Koman-Denas, expanding the water supply network in Vushtrri, renovations at the facilities of the Faculty of Medicine and many other innovations of faculty facilities, but also numerous projects in infrastructure.

The outcome of new projects envisioned in the budget for Radio Free Europe has confirmed incumbent Deputy Minister of Finance and Transference Agim Krasnqi. He has said that the situation created with the coronary pandemic is the reason for the suspension of projects so that the amount of these tools can be spent on facilitating the economic effects caused by the Coronavirus.

New projects are considered only those projects that are envisioned for this year, rather than those that are continuing from previous years. The overall value of capital investments in this year's budget is envisioned to be 624m euros.

Representatives of the business community also stress that suspension of these projects has been necessary in order to provide funds for stimulus or support for businesses that have suffered financial losses from pandemic.

Project suspension necessary

The chairman of the Afarism Oda in Kosovo, Skender Krasniqi, in a conversation for Radio Free Europe, said these vehicles should be used for economic recovery.

“We, like the Ode of Afarism, support this decision because it is a necessary time to discuss the budget and budget changes for 2020. We believe that these vehicles will be re-regarded for support of businesses and workers, so that there will not be a decline in employment and support that businesses as easily cope with this serious crisis, but it is expected to be difficult even in the coming months”, Krasniqi said.

Otherwise, in a study by the GAP Institute called “budget projects before the pandemic COVID-19”, published days ago, it is said that the huge “most of central projects are continuation or obligations from past years, leaving little room for new projects”.

According to the Institute, about 90 percent of central-level capital investments are ongoing by 2019. In the 2020 budget, of the 591m euros earmarked for capital investments from the central level, about 450m euros, or 90 per cent are capital investments, which are multi-year projects continued by 2019. Only 51m euros, or 10 per cent, are new capital investments reflecting the current government's programme.

Economic recovery, challenge for Kosovo

Economic recovery after the end of the pandemic, by economic experts, is assessing the challenge for Kosovo when the damages presented at the local and global level are taken into account.

Most of the businesses in Kosovo, nearly all sectors, have reported high assets of financial losses and reduced production capacities, from measures taken by the incumbent government on 13 March to prevent pandemic.

So far, there is no accurate figure of economic losses, but according to the duty Ministry of Finance and Transference, it is estimated that 6m euros per day. Kosovo is lost due to the coronary pandemic. But representatives of the business community estimate that this value is much higher.

To help business activity, Kosovo's incumbent government has already begun implementing the Fiscal Emergency Pack, worth over 180m euros. While, it has begun drafting the second package for economic recovery worth a billion euros.

International financial institutions have approved loans for Kosovo to cover losses from COVID-19, the disease caused by the coronary.

The forecasts of these institutions for Kosovo's economy, after the pandemic, are not even desirable.

The International Monetary Fund after pandemic has projected Kosovo's economy to shrink by 5 percent.

And according to government officials, by 2020 the forecast for growth has been 4.2 percent in real terms.