Mehmeti: Not enough economic growth in the face of unemployment, raising family loans

Given that if we look at the structure of the economy in the country, it is dominated by commercial enterprises. More work needs to be done in order to change the country's economic structure into farmers of manufacturing companies. Only in this way can we generate economic growth somewhere approximately 6-7 percent that I consider sufficient to address the challenges I mentioned earlier. In this context if we now see only this year's six-month mark of the trade deficit of goods, for 8.21 percent, or over 2.2 billion euros -- that is, we have an increase of 2.7 billion imports by an increase of about 8 percent, exports are about 450 million growth of approximately 5 percent, and we have a deepening trade deficit at 8.21 percent”, Mehmeti said.

The former BQC governor stresses the need for subvention of local producers, such as the economic revival package.

The “has been a good moment behind the pandemic for this package of economic revivals instead of going through that package and working more in terms of being subsidised, supported, pushed forward to have as much production in the country as possible in order to meet Kosovo's needs for various products. This would greatly affect changing the country's economic structure in favour of production companies. So only the growth of production companies, the growth of production, we can address these challenges, employment and high trade deficit. We're constantly seeing that we're only increasing import from year to year. In just six months we have a deepening trade deficit of 8.21 percent. We need to have as many domestic and external investments as possible in favour of production companies”, Mehmeti has declared, as most foreign direct investments are viewed by the diaspora.

It considers that these investments are not production fields, but are largely in real estate.

The problem is in the foreign direct investment structure, if we see it as the structure of about 60 percent of these direct foreign investments are from diaspora, in the purchase of real estate, housing and land. The rest are approximately 30 percent financial services, which is, in fact, money owned by institutions, foreign capital banks, or other institutions that have not attracted. We are not talking about investments in production fields, but primarily foreign direct investments in real estate”, he said.

Another concern, according to him, is the increasing percentage of domestic loans, which he feels are not for sustainable development but for overcoming inflation - flowing crises.

It's actually that consumption is one of those factors that's impacting economic growth, but it comes from many factors that affect consumer growth, in this case we have an increase in activity that is one of those factors. Now it's noted, with the latest data, we have an increase of about 20 percent in credit growth, I'm talking 15 percent in total, if we only look at family credits, they've scored about 20 percent of the high credit increases. This suggests that individuals or companies are entering loans, are having trouble overcoming the crisis that is in Kosovo as a result of inflation stemming from pandemic and other factors”, Mehmeti said further.

Even the high value of loans is one of those indicators that shows that individuals, companies are having difficulties, or if we talk about individuals are having families. Mostly we're talking family loans. Within 15 percent of loans, only family credits mark up about 20 percent. It shows that families in Kosovo are having difficulties spending months a month with salaries they have. That is why they are obliged to take various loans to overcome the problems and challenges they have in their families”, Mehmeti said. / EO