Trade deficit growth seen with concern by economists, require institutional action

The chairman of the Kosovo Chamber of Economics, Lulzim Rafuna, has told Online Economy that the decline in exports would have to alarm the institutions, so it has called for actions in order not to increase its trade deficit.

And this is going to be going unfortunately, over the past two years, we have a drop in exports and this was supposed to be a huge alarm for Government, to see what happened and why it's happening. Where is the challenge of declining exports. The decline in exports also means a decrease in domestic production, so Government needs to be urgently identified with the problem and dealt with the problem of not allowing more trade deficits to grow. The ratio between import and export is covered by only 14 percent, meaning only 14 percent of it being imported. The import, on the other hand, is increasing both as a quantity but as a value of”, Rafuna said, adding that the strategy seems to be missing for a long time.

The deployment of two, three major businesses that have exported from Kosovo, their shift from one market to another market has affected. And the second is the issue of inflation that has affected businesses and these are the two larger ones. He needs to see what it takes to intervene to fix the” situation, Rafuna said further. \

Economist Besnik Avdij has said the deficit in Kosovo has been forwarded in favour of import. He said the government should empower local businesses.

The trade deficit has marked continued growth in recent years, it is normal to take into account that we largely import consumer products from abroad. With the cost of production increased and other operations on this line in the supply chain is understood to have one, maybe not necessarily an increase in consumption in the real value of the amount being consumed, but an increase in nominal value so in the sense of the revenues we spend on these consumer products”, Avdij said.

According to him, the state should work towards strengthening local businesses, where it says private businesses should be allowed to invest.

The cost of doing business in Kosovo is difficult to make, either because of the overall costs that are rising because of prices, because of the labour market in terms of the workforce, because of other skills and skills needed for services and other very specific business operational parts. Normally even competition makes it its own that you are, to some extent, unable to become a form of little players in the economy to penetrate. However, much needs to be done through mechanisms that our institutions offer to support local production and the delivery of services mainly in order to export. This means that prior to all needs to be covered local demand with these products and services, but the growth of exports significantly would ensure sufficient revenues from abroad, which, to some extent, would also cover our expenses in terms of consumption outside”, Adwit said.