Inflation: These are forecasts for Kosovo's economy in 2023

The double inflation increase that made the consumer basket worse and slowed economic activity.

This trend characterised Kosovo almost throughout 2022, but is expected to stabilise or decline in 2023, according to financial institutions.

As elsewhere in the world, price hikes began in late 2021 as a result of disorders in the chain of supplies caused by the pandemic and the coronary.

Prices have gained greater momentum when Russia has launched the invasion of Ukraine in late February.

Kosovo Central Bank data shows the country will complete the year at the average inflation rate of 12 per cent.

The average employee salary, according to the Kosovo Statistics Agency, was around 480 euros.

In an effort to ease the impact of inflation, the Kosovo government approved a package worth 150m euros in September.

It benefited a number of citizens, mainly families with social assistance and pensioners.

Kosovo Ministry of Finance officials did not respond to REL's request to negotiate the issue.

According to the GAP Institute, authorities have had to take measures that would also support increased domestic production, since inflation in Kosovo is largely imported.

Kosovo imports most of the products from neighbouring states and those of the European Union.

From the Kosovo Economic Oda say, as well, the measures taken by authorities were not enough.

Lulzim Rafuna, chairman of this office, tells Free Europe Radio that the Government of Kosovo has not acted by laws in power, has not raised wages in the public sector, respectively, in line with economic growth.

Over 80,000 people in the public sector in Kosovo are employed, with an average salary of around 620 euros.

Kosovo Central Bank estimates of economic growth in 2022 are the most negative.

For 2023, the Kosovo Central Bank forecasts inflation decline.

The governor of this institution, Fehmi Mehmeti, gives more details to Radio Free Europe:

Our “expectations are that in the second six-month of 2023, we have reduced inflation to 6 percent, and that will greatly affect the citizens' payment capacity, which will then affect consumer growth as the main component of economic growth in the country”.

Foreign economists, who quote some international media, also expect inflation to decline in 2023.

One reason for this optimism is the stabilisation of the supply chain, though it is difficult to predict with certainty what will happen on the geopolitical scene.