Experts: High inflation is burdening businesses, impoverishing citizens

According to them, price hikes are lowering citizens' purchasing power, while lack of production investments and political instability are hampering the country's long-term economic development.

The former head of the Kosovo Economic Ode, Safet Gerjaliu, told Online Economy that alarms for inflation and economic problems are standing in the shadows of the political crisis and the power debate.

Disturbing is the fact that the recommendations come, whether by local experts or international institutions, that do not go in favour of daily politics, they are either silent or rejected without arguments. In this direction, in terms of the negative effect of rising inflation to 7.5% in 2026, we have alarmed that it is really a disturbing situation. This all lies in the shadow of the political agenda, in the shadow of the marathon election, and today, instead of working for the functionality of institutions and jointly downplaying the negative effects of such inflation, we still have debate about the government, about the president, and about other phenomena which are characterising Kosovo in the last few years”, Gerjaliu said.

He said international reports have also raised concerns about corruption, political employment and media freedom.

“is not only the problem of inflation that has come as alarm from the European Union. There have been reports of three dealing with political employment, attacks and lack of media freedom, but above all, corruption and tenderomania that has become Kosovo's carcinogenic disease. Therefore it is really the time when it is needed as soon as possible, it is possible for Kosovo to have political stability. Political stability which is difficult to achieve with this policy mentality, because in Kosovo it is not won by elections to govern but to rule. And in this respect I believe that challenges will continue even further, because there is much more a willingness to neglect these problems than to confront and to solve”, he said.

According to Gerxhaliu, inflation is reflected directly in the citizens' standard of living.

And what makes this situation more difficult, where Kosovo has twice the inflation rate of Western Balkan countries, has twice as much inflation based on European parameters and standards, and this is a direct blow to citizens. Because the minimum wage, average salary, but whatever wage in Kosovo is not flexible to react on the basis of rising inflation. And this is a direct blow to the citizens' standard of living, to the decline of purchasing power, and definitely with a deepening social policy which with help cannot be healed or averted. Economic development is needed, the private sector needs to be paid a lot of importance, and it is definitely the time when the economy should depoliticise”, he said.

Economics expert Ismet Mulaj also estimated that rising inflation is depleting citizens and affecting businesses negatively.

Of course this makes citizens poor. It makes citizens poor, of course it also makes businesses poor, because citizens consume less, buy less. Or, citizens don't invest. Since they do not invest, that is, for all financial accounts that they have for consumption because of what it says, that is, because they are basic needs, the business is discouraged. Of course there are businesses today, the biggest investments they make -- Kosovars in capital investments -- are in Albania. About 600m to 700m euros have invested in Albania”, Mulaj said.

He said Kosovo should focus on major development projects that would boost investment and economic growth.

“Capital investments in Kosovo are smaller than they are in Albania. As long as we have all of this capital flowing into other countries, why not pour it into Kosovo? Even the projects that are being discussed, for example not the Orllati company, not the construction of new energy capacities, are still paper projects as it were. We still don't see anything concrete. Therefore, I would have to focus that 4-5 projects that are of vital interest to Kosovo would make economic change in Kosovo. If we attract several billion euros, Kosovo will improve the balance of doing business, i.e., trade balance, and there will be no economic growth, about 4% as the World Bank says, but maybe 6 or 7%”, Mulaj said.

According to the Kosovo Statistics Agency (ASK) in April 2026, Kosovo marked the highest inflation rate in the past three years, reaching 7.5 percent, while in May inflation was registered at 6.8 percent. According to the data, the inflation rate in Kosovo remains significantly higher than the European Union average, which is about 3.2 per cent. /Periscope