Experts demand measures against inflation: The Lower Economic Growth in the Last Decade

Kosovo this year will have a marked slowdown in economic growth. Bruto Local Product growth(GDP) for 2022 will be the lowest in the last 10 years, economy experts estimate, even relying on International Monetary Fund projections (FMN). The same call for measures to be taken to ease the inflation effect.

Professor in the Czech Republic Florin Aliu tells Kosovo that beyond the contraction of economic growth in the country, a serious situation caused by the energy crisis is expected.

While talking about inflation, he points out that there may be business bankruptcy as a result.

The World Bank and the Monetary Fund have already predicted that after that boom we will return to the actual levels of economic growth, so we will be there 2-3 percent. But beyond economic growth, I see an even blacker scenario. The period we're entering will be a serious energy crisis. This crisis has been acknowledged by the prime minister himself, who will likely have increased energy prices, or at least import will be very expensive. Inflation is reaching levels, according to the World Bank, 20 percent of citizens have less income. When citizens have less income, their expenses are also lower. Therefore, studies show that between 6 months and a year after inflation exceeding 15 percent, real effects on the economy will begin to feel because citizens have less income and have spent their savings, which will then be reflected on businesses. This means that businesses will have fewer sales, fewer circulations, and we may also have bankruptcy. Businesses, which are heavily indebted, may also go to bankruptcy”, Aliu says.

Professor at the Faculty of Economics at UP, Nagip Skkerer, says IMF forecasts of economic growth show that in the last decade there has been no greater economic decline in 2022.

In Kosovo's case, the International Monetary Fund has provided clear signals that Kosovo's economy is not going according to predictions the government and other institutions foresee in Kosovo. The IMF has projected to have a slowdown in economic growth, which shows and signals that we have never had a bigger economic downturn than in 2022 for Kosovo. So the IMF has projected that overall economic growth will be 2.7 per cent, even though predictions have been over 5 per cent from local institutions, the Government of Kosovo, respectively. National resources for our country's economy show that the IMF is absolutely right, and we're going into an economic downturn when it's known that towards economic downturn, The IMF has also projected Germany and other European economic powers to go into an inevitable recession in the following year”, he says.

Professor Skferer also speaks of the high rate of inflation, suspect.

It calls for measures to be taken to ease the inflation effect.

“Reality in us proves to have alleged inflation, over 20 per cent at the moment has been compared to the same period last year, and this shows that we have to take some necessary structural measures in some of the economic sectors in order to ease the effect of inflation on the country's economy and in a way to preserve an economic and social prosperity in citizens, which day is facing economic hardship<1>, he points out.

That this year there is slow economic growth, says Central Bank of Kosovo Governor Fehmi Mehmeti.

According to him, slow economic growth is expected to be about 3 percent.

The high growth of activity accomplished in 2021 is expected to slow down in 2022, and our predictions are to be about 3 percent. The slowdown of economic activity is expected to be largely due to lower domestic demand growth, as well as the growth of the net <x1) export deficit, Mehmeti has said.

According to economic experts, Kosovo has entered an economic crisis, which is producing negative effects on the economic and social aspect of Kosovo society.

Based on the latest report, The IMF lowers the forecast and expects Kosovo's economy this year to grow by 2.7 per cent.

While Prime Minister Albin Kurti at the government's recent meeting has said that Kosovo has had historic economic growth for the year that went by 10.7 per cent, while, according to him, in the first quarter of this year, the same has been 4.9 per cent of the local Bruto Product, after inflation is dropped.