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| World Bank officials presenting the Report in Pristina |
The World Bank Office in Kosovo has presented the Regular Economic Report for the Western Balkans.
The Regular Economic Report covers developments, chances and economic policies in Kosovo and in the other five Western Balkan countries and is drafted twice a year by World Bank economists.
Agim Demukaj from the World Bank, said to Ekonomia Online that economic growth in Kosovo could reach up to 4.4 percent, slightly higher than in 2016, 3.4 percent.While the next two years is forecasted to get increased up to 4.8 per, but because of political instability this increase may not happen.
"Regarding to the next two years, the growth is projected to reach up to 4.8 percent in 2018 and 2019, but this forecast depends on the risks that could lower it, including political instability. The fast growth in the eurozone has affected Kosovo to take advantage of this. The prospect is positive so its prediction depends on risks that can increase or reduce it."
"Kosovo has performed better than other countries. From net exports which compared to the previous year have come out more positive. In Kosovo, we saw a rise in employment from the data of the first two quarters of the year and because of that the unemployment is increased at about 43 per cent. We see it positive as we see that more people are more active in the labor market," he said.
Demukaj said the fiscal deficit is expected to grow 2 percent of gross domestic product this year, and the contribution comes from the rising spenditures mainly due to veterans and pensions transfers.
According to him, public debt is low, but is growing at a rapid pace where by the end of the year is expected to be 17.5 percent.
"Public debt is still low but is growing at a rapid pace where by the end of the year is expected to be 17.5 percent of gross domestic product. We see that credit growth has risen in Kosovo and low interest rates have spurred private lending. There is a solid growth which is in tune with economic growth in the future... "
He further said that in 2017 the budget was cut due to the non-absorption of investments through the investment clause and if this continues will create barriers in the coming years.
Linda Van Gelder, World Bank Country Director for the Western Balkans, said the report appreciates the developments in the six Western Balkan countries.
"The six countries face job creation challenges. I want to highlight three key messages. Balkan economies have a GDP growth in the region that is expected to increase by 2.6 percent and the biggest growth was in Kosovo, Albania and Montenegro.
"In Kosovo the economic growth is projected to increase from 3.4 percent in 2016 to 4.4 percent in 2017, mainly generated by investments, exports and consumption. Growth in Serbia and Macedonia has slowed down. After a decade of employment, it has returned to 2008 levels for all countries excluding Bosnia. The economic forecast is vulnerable to political developments. "
"Political crises this year have prevented the growth in Macedonia and cold winters in Serbia. The growth in all countries is projected to be higher than anticipated...".