Kosovo risks facing stagnation

The government should take special care of businesses at the time when the country is facing high inflation. So said the chairman of the Kosovo Economic Ode, Lulzim Rafuna. He told Kosovo Radio that it must be forwarded to the European Union and beyond.

“The challenge is inflation which is the highest ever remembered. Add here and do not spend the pre-priced amount on the budget for capital projects, as well as the electricity crisis that businesses are in informative darkness about what will happen, he said.

Economy expert Safet Gerjaliu considers that Kosovo is heading towards stagnation. He said this situation is red light for the country's government.

“An economy which is hit by inflation uncontrolledly and institutions do not have defence mechanisms is the first warning symptoms of stagnation. In 2022, only 10% of budget means dedicated to capital investments have been used, and that is the biggest risk Kosovo has been filled with stagnation”, Gerjaliu said.

The stagnation is wide-scale inflation and the stagnation of the country's economic development where there are no capital projects. Gerxhaliu stressed that capital investments must be increased so that the private sector can create stability and new jobs.

Besart Dresaj, director for Development Policy in the Kosovar Alliance of Business, said that failure to introduce the means that are dedicated to capital projects is hurting the country's economy.

“This investment contraction presents concern for the future of Kosovo's economy and speaks of the lack of responsibility and, as a result, Kosovo risks falling into large scale inflation in next year”, Dresaj said.

In total, the budget of 2.75 billion euros for the year 2022 approved by the Government last year was estimated at 705m euros for capital projects. According to Institute data “GAP”, from projects planned at the central level, only 9% of them have been implemented, until local level only 19%. Inflation is caused by the global crisis.