BQKA warning of rising inflation, economy connoisseur: Businesses to faten consumer prices

Regarding these developments, economic connoisseur Jakup Bellaqa has spoken of Periscope.

“Viti 2026, in this year the budget has been approved higher than the preliminary year, which is worth over 4 billion euros and in this year even the minimum wage from July has come into force of 500 euros, which affects the increase in purchasing power, because no wages in the private sector are declared below this threshold, so statements are made in the Kosovo Tax Administration”, said Bellaqa.

According to him, the measure will also have an impact on the formalisation of the economy and the growth of budget revenues.

“also affects reduced informality and impacts on increased pension contributions and increased wage taxes, which also affect Kosovo's budget growth. With the minimum wage increase, more than 150 thousand workers benefit, namely those who have had salaries less than 500 euros and now increased to 500 euros, and also impacting increased consumer demand”, he said.

However, Bellaqa estimates that some sectors will find it more difficult to cope with the increase in costs.

But in this case businesses that run low margins, such as gastronomy, textile and retail, these businesses will have an extra cost, and these will fatten consumers or buyers, because they will increase prices, as they will have little difficulty”, Bellaqa said.

Less Economic Growth

For this year, the CEC has seen lower growth than in 2025.

For 2026, CEC projections suggest economic activity will mark growth of 3.5 percent. The increase is expected to be supported mainly by domestic demand, by consumption and exports respectively, while challenges in international trade and global uncertainty can have continued negative impact on the pace of economic growth. Factors expected to influence this growth are the revenues from the diaspora and the stabilisation of prices on international markets, which may influence increased confidence in consumers and investors. Internal demand is expected to contribute 3.0 percentage points to BPV growth. Private consumption is expected to contribute 3.3 percentage points, supported by increased remittances, compensation of workers and personal loans”, the report says. “Invesions are expected to contribute negatively by 1.0 percentage points. Exporting goods and services is expected to positively impact 2.9 percentage points, especially as a result of increased diaspora spending, while import of goods and services is expected to contribute negatively 1.5 percentage points, making net exports have a positive contribution of 1.4 percentage points to economic growth”.

The BEC report says the economic outlook remains exposed to risks and uncertainties that could negatively affect economic activity. It stresses that geopolitical tensions could affect energy prices and supply chains, with possible negative effects on trade and investment. Similarly, the potential slowdown of economic activity in the EU reportedly presents a factor of uncertainty about Kosovo's economic growth, taking into account close trade and financial ties.

The document also speaks of the region. In the Western Balkan countries, economic growth in 2025 is estimated to have averaged about 2.9 percent, marking slowdown compared to 3.7 percent in 2024, according to the IMF's assessment. However, developments within the region were not uniform.

In Kosovo, the slower growth of private consumption, as well as the deterioration of net exports, affected the pace of growth. In Albania, weakening external demand, largely as a result of the slower recovery in business partners, particularly in Italy, as well as the estimate of money that has increased production costs by reducing export competitiveness, along with the slowdown of household consumption, affected the slower pace of economic growth”, the document says./ P ERISCOPI/