According to World Bank, inflation in Kosovo will slow to 3 per cent

This year, inflation in Kosovo, according to World Bank expectations, will slow to 3 per cent and gradually drop to 2 per cent in the medium-term.

As a result, interest rates are expected to decline until the second half of the year 2024.

The World Bank office in Pristina has told Kosovo Radio that they anticipate slow inflation by the end of 2024.

However, according to the World Bank, there are risks that could lead to deviations from this project, including the possibility of a return of inflation driven by intensifying geopolitical tensions, as well as domestic pressures for higher salaries.

The World Bank currently predicts that inflation, measured with the Consumer Prices Index, will slow to 3 percent this year and gradually drop to 2 percent in the medium-term”, says the World Bank's response.

According to the World Bank, the projection is based on expectations for lower pressures from international energy, food and raw materials prices for which Kosovo is primarily imported.

Last year interest rates rose again in an effort to curb inflation, while a Central Bank survey conducted in January shows that in the second half of this year, the World Bank forecasts a slight decline.

Even the chairman of the Kosovo Economic Ode, Lulzim Rafuna, says interest rates must be reduced.

“We are seeing inflation decline. It's no longer in that peak that it was last year, and there's no reason that interest rates were raised”, Rafuna said.

The leader of the Kosovo Alliance of Business, Agim Sahini, said interest rates in Kosovo are the highest in the region and they are impacting investments.

“Eonomia cannot be developed without bank support. Banks have emerged the most profitable sector at the expense of citizens”, Sahin said.

In July 2023, interest rates for new loans in Kosovo peaked at 6.7 percent, while in January of this year they dropped to 6.3%.