Economy: The year of inflation for the government to manage

It is inevitable that the war in Ukraine slowed economic growth throughout Europe and increased inflation. This was mainly due to increased energy prices, which then had chain effects.

But, did you know how to deal with this Kosovo situation, in which it is still in today, and how the economy in general went, Economy experts point to their end-year proposal for Periscope.

They feel that there was no progress whatsoever. They blame the government for not knowing to interfere with adequate policies in the face of inflation, or even in some areas that would affect growth in economic development.

Economic Knower and university professor, Musa Limani He looks down on Kosovo's development, which he says is the poorest in the Balkans.

“Viti 2022 has been a year of economic challenges, since it has affected coronary and inflation. These two factors have been determinant in slowing flows, apart from inflation. The government has not implemented any consistent economic policy, especially to absorb inflation, and therefore the economy has been severely damaged. We're taking two three indicators of economics. Even though the government with relative data saying we have an increase in the expert, or we have an increase in economic development, I don't agree with the relative numbers they give them because relative figures do not give the actual state of real economic development. Therefore, considering the economic flows of 2022, comparing the gross product for a resident as one of the most relevant indicators expressing the level of economic development, Kosovo entered the most underdeveloped ranks of the Balkans and Europe. We have an increase in import, an increase in the external trade balance deficit. Exports have increased year-on-year, but they are relative numbers and it is not an essential increase in changing the economic structure. So all economic indicators show that economic flows in Kosovo have not been good”, Limani told Periscope.

Kosovo is expected to have an economic growth of 3 to 4 by the end of 2022. Thus has Kosovo Central Bank Governor Fehmi Mehmeti declared. With this growth is not enough development or employment.

According to Leman, this growth is not real.

“Recognising Kosovo's economy, and the parameters we posted, cannot have more than 3 percent growth. Either way, it can find that Kosovo's economy is in a very low stage of development, or as we call it recession. So that lower stage, which is characterized by the lack of local production, with an irresistibly economic structure, with import growth, etc. Then, it's going down with bomb statements that budget revenues have increased and that the 2023 budget will be the highest yet. There is no discussion that budget revenues increase annually. But we also need to do an analysis of where incomes have grown. I can find with high responsibility that increased revenues are not the result of economic policy changes and any structural change, but are the result of price hikes”, Limani says.

He thinks the measures the government is taking for slowing inflation have not provided the necessary effects because they have not been anti-inflammatory measures.

Kosovo's “Community and business are facing an extremely serious problem. To illuminate the negative directions of economic flows, Kosovo must have the Long-term Development Strategy, which no government has so far done. Several sectoral strategies, such as the energy strategy, have been made, but there can be no such strategy in this case, without knowing Kosovo's overall development strategy. So as the current government is not even implementing a consistent macroeconomic development policy. In our economic development, it becomes ad- hoc, without visionless strategies, and therefore we have such a serious economic and social situation”.

According to him, the Government urgently needs to take fiscal, credit, foreign trade measures, etc. There are times when people take credit to pay the loan, and this is a very serious social situation.

Economy expert Safet Gerjaliu He thinks it's utopic to talk about the economy in a state where the political agenda is determinative.

He thinks the government is doing diplomacy when it's providing economic development figures.

The fact that we have the problem with unresolved Serbia, as the focus is on dialogue, definitely in this year the economy has been left behind. There are attitudes different from what the government says and what it really is, but the truth is that in 2022, Kosovo has no reason for euphoria for economic growth because it has been an inflation year. We have low experts in quantity and financial growth, it's the first. The very fact that we have financial import growth, but quantitative contraction is second. The third is that everything promoted and calculated is double the cost paid by citizens last year. Therefore, Kosovo must understand the truth and must resemble a body that has a rope and until you have that rope it will be impossible to talk about the economy, and the solution of this rope is Serbia. Dialogue is really very important, but if you ask me about foreign investors, I don't know how to count it. That's why it's time the experts have to talk about the economy, and not every time it has to be policy determinet. It is possible to accept reality rather than disguise or grace that reality because economic trends best affect the citizen of Kosovo. Business and the government will soon influence them. That's why it takes work, it takes commitment. There has to be a depoliticisation of public enterprises, because today you can be in these companies only as party militants and not as expert and worth”, Gerjaliu says of Periscope.

The former head of the Kosovo Economic Oceans is asking the state to have more dialogue with businesses in the future.

For the economy next year, much more must be done than yet. I'm saying once again, if there's a decline of experts in quantum terms, if there's also a decrease in the import of strategic products, such as oil, iron, I believe they're disturbing indicators, and when all this is added to the fact that the decline of foreign direct and indirect investors is a concern that we have to strengthen economic diplomacy. It is impossible to have foreign investors unless we have public-private dialogue with our businesses because Kosovo's economic ambassadors are Kosovo's own businesses, and the diaspora each contributed, contribute. But for the diaspora it needs to be done more and not just calculate it, it feels like they send it”, he says.

And Kosovo Business Alliance Chairman Agim SahiniHe thinks the government failed to harmonise many demands for the economy.

After the assessment of the Kosovo Business Alliance, 2022 is closing in on a larger economic downturn after Kosovo's independence. Of the 10.7 economic growth in 2021, this year is closing by about 3 percent. The country's government failed to harmonise many economic and political demands with the private sector, as well as with the economic factor -- international policy, so we have an economic downturn between Kosovo and countries traditionally friendly. In short, this is the year of economic, political and integration and developmental impasse”, Sahin told Periscope.

On the other hand, about 50 percent of the means dedicated to capital investments are that the Government of Kosovo has failed to spend. But, the CEC has argued the developmental stagnation in Kosovo with the war in Ukraine.

Governor Fehmi Mehmeti has said that Kosovo's economy has also been affected by global developments, such as Russia's war in Ukraine, which, according to him, interrupted the supply chain.

Kosovo's “Eonomia began in 2022 with a good perspective as a result of the successful year that was in 2021 and was marked by a 10.75 percent increase. During 2022, however, the change of global dynamics, as well as the aftermath of the war in Ukraine, were accompanied by increasing inflation, change of monetary policies, increased interest rate and slowdown of world trade as a result of the supply chain cuts that were reflected in global economic activity, as well as in Kosovo”, Mehmeti has said.

The forecasts for next year are that European Union countries could get into recession, or general decline in economic activity. In that case, the recession would also be reflected in Kosovo. / P ERISCOPI/