World Bank: Kosovo's economy with slow growth

The newest report about the update of the economy for Europe and Central Asia says economic activity in Kosovo slowed down. The World Bank's newest assessment is that, however, there is an increasing improvement in the European economy, but remains below the first levels of pandemic.

Kosovo, according to the report, needs to continue with structural reforms in the energy, education, social protection and health sectors.

Amid a challenging global context, Kosovo's economic growth slowed, but remains positive. This is the latest economic update of Europe and Central Asia that was published by the World Bank during Thursday.

The rise of Bruto Local Production reached 2.9 percent in the first half of 2023, supported by export and consumption performance.

<x0).Inflation slowed, but basic inflation remains up. In the medium term, growth is expected to reach about 4 per cent, which is close to Kosovo's potential. The consumption remained stable in Albania, Kosovo and Montenegro, driven by the recovery of tourism, but weakened in Bosnia and Herzegovina, Northern Macedonia and Serbia due to the weaker demand for exports from the EU”.

Despite continued inflationary pressures, Bruto's growth of domestic production is expected to reach 3.2 percent in 2023, driven by positive export performance and private consumption.

“Exports of services run by the diaspora are expected to remain positive throughout the year. Positive credit growth, sustainable remittances, higher public wage spending after implementing the new public wages law and high levels of public transfers will support increased consumption”, the report said.

The medium-term outlook remains positive, with growth expected to accelerate towards 4 percent, approaching the level of economic activity to Kosovo's potential.

Increased investments, says the report “expected to increase in 2024-2025, given the implementation of the Energy Strategy”.

The report cites continued uncertainty about the war in Ukraine, slowdown in Europe and the internal political context bring considerable risks. Poverty is projected to continue its decline, at 23.5 percent in 2023, using high-income poverty”.

The World Bank's economic update report says inflation is expected to slow down, however, price rates will remain high this year.

The closure of the income gap with the European Union requires an acceleration in the implementation of structural reforms in the energy, education, social protection and health sectors. /Monitor Magazine