Nearly 5 billion euros in savings in Kosovo: Where does this money go?

Of this value, more than 3.3 billion euros are citizen deposits, while the rest belong to companies.

According to the Central Bank of Kosovo, the value of deposits in 2021 has marked an increase of 12.4 percent compared with 2020.

More precisely, according to the CEC, the value of new deposits, collected last year, has reached 446.1m euros.

Of the Banks Association in Kosovo, say most of the deposits over 76 percent has been used by the credit banks of the economy.

By the end of 2021, the total value of loans granted by banks has reached 3.75 billion euros.

“Saving the report between lending and deposit is important, since it shows the health of the banking sector, which has been constantly careful in the credit share, through preserving liquidity at acceptable levels, according to the best international practices”, is said in a written statement by the Kosovo Bank Association, provided Radio Free Europe.

Albulen Kastrati, professor of economics at the AAB College in Pristina, says it would be better to spend savings or invest in businesses or real estate, not be kept as cash ready in banks.

But, according to her, investment platforms are missing.

Of course, there is [even] the financial education of the population to use these investment deposits”, says Kastrati.

She adds that the interest rate in deposits, in recent years, has declined greatly and, as such, does not ensure dignified return to depositors.

According to Kosovo Central Bank data, the average interest rate in long-term deposits in the banking sector during January-December 2021 has been 1.3 per cent, while the interest rate for loans received is brought about 5.8 per cent.

What affected the growth of deposits?

The Association of Banks of Kosovo says increasing the value of deposits testifies to citizens' confidence in the banking sector.

According to the association, increased deposit value has affected the best performance of businesses following the release of restrictions imposed by the COVIDD-19, but also the withdrawal of savings from the Pension Trust.

In 2020, Kosovo citizens have been given the opportunity to attract 10 percent of the savings in the Trust to cope more easily with the economic difficulties that the pandemic could have caused.

At that world, an estimated 200m euros have been withdrawn from the Trust.

Even according to a report by the Institute for Advanced GAP Research in Kosovo, 40 percent of deposit increases have promoted savings issued by the Trust, which have been deposited in private accounts and are not immediately spent.

Accounting for savings in Kosovo is the Deposit Insurance Fund. This fund, which was established in 2011, works to protect depositors from defeat, in case of a license revocation or closing a bank.

The economic situation of citizens in numbers

The average gross salary in Kosovo is estimated to be around 460 euros. The average gross salary in the public sector is around 620 euros, while in the private sector around 380 euros.

According to February data from the Kosovo Statistics Agency, more than 25,000 families with 102,333 members have received social assistance from the Kosovo state budget. This assistance is given to families with difficult financial conditions and that have no employees.

According to official data, Kosovo's unemployment rate in 2021 has been about 26 percent.

The World Bank's recent record of poverty in Kosovo is 2017, and according to them, over 23 percent of Kosovo's citizens live in poverty.

In Kosovo, almost all consumer products have been significantly expensive since last year.

According to the Kosovo Statistics Agency, inflation in March in Kosovo has increased by 10 percent, compared to the month March 2021. / REL