The consequences of pandemic: Economic downturn could amount to 11% if the state does not operate

Central Bank Governor Fehmi Mehmeti says the economic downturn could amount to minus 11 per cent, but according to him, it depends on the delay in implementing the emergency plan.

Each day late in injecting funds into the economy affects negatively economic growth. We after a month have made the new stereo and concluded that the economic downturn in Kosovo is minus 5.9 percent from minus 2 percent. In the eurozone countries according to the European Central Bank assessment, the economic downturn could be minus 7.5 per cent, while IMF estimates for Kosovo will be 11 per cent, but all of this depends on how much delay we will have with the aim of adopting the emergency plan and then switching to recovery plan”, he says.

There will be no budget recovery plan, says Mehmeti himself, who he says will not be able to pay the planned salaries for the part of the Emergency Pack.

“Plant of recovery without budget review will no longer be able to pay salaries which are planned to pay for the share of the emergency package, so I believe that the sooner this budget revision is approved and the faster the recovery plan is approved, the better for the country's economy and will influence the economic downturn to stop and there will be positive” trends.

The longer this period of emergency package failure and the beginning of implementation of the package of recovery will negatively affect the economic downturn, and certainly the consequences will be too big”, Mehmeti says.

Mehmeti says that more than 99 percent of credit-repression businesses have been implemented by banks in Kosovo, while 86 percent of demands have been realised in physical persons.

According to the Governor, this outlook situation in Kosovo has caught the financial sector in good condition by taking the liquidity report as an example.

“Kych in the first week when the Government was formed, we had a meeting with Prime Minister Hoti where the Economic Ods and other business representatives and the ministers of economic dictatorships, where the economic recovery plan was introduced, where there are two measures that are direct, related to the subsets related to the Central Bank”, he said.

The extenuation of access to finance, where we've been very active since the pandemic started and we've made a decision to coordinate with the banking association to extend credit installments that were carried out according to the BQ's decision. I can say how the process has gone well, I know there are complaints, but what's positive is that if we look at all the demands of pushing loans that belong to a vast share of businesses, it's over 99 percent, while 86 percent of the physical person has been realized, he tells EO.

As for the economic recovery plan, Mehmeti appeals to address the challenges Kosovo has consistently faced.

And who, according to him, are unemployment and a high commercial deficit. For this, Mehmet says the state cannot be kept in trade.

What I mean is a good moment for this recovery plan to address the challenges Kosovo has constantly had. Where continued economic growth has taken place, but there have also been two ongoing challenges, which have been the high trade deficit and unemployment”.

“This can be addressed by changing the structure of the economy. Remember that the facility in the country is dominated by commercial companies, while the state with trade is not maintained, is an important sector but should change the structure of the economy and have as many production companies”, he said of EO.