An International Monetary Fund (IMF) mission, led by Stephanie Eble,
visited Pristina during May 30-June 5, to discuss recent economic
developments and Kosovo’s economic outlook. At the conclusion of the visit,
Ms. Eble made the following statement:
“Economic performance continues to be solid, with growth in 2018 expected
at about 4 percent. Inflation remains subdued and the external current
account deficit has narrowed, in part due to statistical revisions. The
banking sector remains well capitalized, liquid and profitable. The
implementation of the 2018 budget is broadly on track: some revenue
shortfalls and overruns in social spending due to non-implementation of
benefit scheme reforms are expected to be offset by savings in other
areas.”
“While the near-term outlook is positive, fiscal risks have increased. In
this regard, the mission advised not to move ahead with the current draft
law on compensation of teachers, due to its large direct and indirect
fiscal costs that will burden the budget for many years and crowd out
priority spending; advance with overdue war veteran reforms; not to
introduce any new untargeted social benefit programs; accelerate the
restructuring of the public enterprise sector to restore its financial
viability and reduce inefficiencies; design the public administration
reform within the limits of the wage bill rule; and carefully monitor and
control the issuance of government guarantees that could significantly
increase public debt.”
“At the same time, structural reforms to support private sector development
should be accelerated to achieve stronger and sustainable growth that
Kosovo needs to reduce the large income gap with the rest of Europe and
address the high unemployment. In this regard, the mission reiterated the
need to advance the implementation of education, governance,
infrastructure, labor market, health and tax administration reforms.”
