## IMF Executive Board Completes the Second and Third Reviews of Kosovo’s Stand-By Arrangement

_IMF News, March 13, 2017_

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**Canonical URL:** [IMF Executive Board Completes the Second and Third Reviews of Kosovo’s Stand-By Arrangement](https://www.imf.org/en/news/articles/2017/03/13/pr1780-imf-executive-board-completes-the-second-and-third-reviews-kosovo)

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## Bibliographic details
- Authors: Arrangement Press Release No.
- Published: March 13, 2017

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### Review outcome and financing
- On March 13, 2017, the Executive Board of the International Monetary Fund (IMF) completed the second and third reviews of the Republic of Kosovo’s economic performance under the Stand-By Arrangement (SBA).
- Completion of the reviews enables the disbursement of SDR 79.20 million (about €100 million).
- This disbursement would bring total disbursements under the SBA to SDR 135.40 million (about €172 million).
- The Board approved the authorities’ request to extend the current SBA to August 4, 2017 to facilitate policy continuity and allow time for ongoing structural reforms to progress.

### Program background and objectives
- On July 29, 2015, the Executive Board approved a 22-month, SDR 147.50 million SBA for Kosovo.
- The SBA supports the government’s economic program aimed at:
  - raising Kosovo’s economic potential by creating fiscal space for growth-enhancing expenditure;
  - preserving low debt;
  - upgrading key infrastructure by catalyzing donor resources;
  - boosting competitiveness by realigning labor costs, removing structural obstacles to credit, and creating a more level and transparent business environment.

### Assessment of performance and macroeconomic conditions
- The IMF assessment (statement by Mr. Mitsuhiro Furusawa, Deputy Managing Director and Acting Chair) highlights:
  - “Kosovo has performed strongly under the program. The economic recovery continues, led by robust domestic demand growth.”
  - “Policy implementation has been laudable. Maintaining this momentum through the end of the program will help to lock in these gains in macroeconomic and financial stability.”
- Stronger public finances were identified as key to the program’s success:
  - Authorities have remained well within their fiscal deficit limit while improving budget composition.
  - Budget composition improvements were achieved by shifting focus away from unproductive current spending and creating more space for growth-enhancing capital investments.
  - The authorities have significantly boosted fiscal buffers, viewed as critical to macroeconomic stability in a unilaterally euroized country.
  - The 2017 budget is described as being in line with the program’s objectives and expected to support healthy public finances, a further shift toward capital investment projects, and other measures to support durable growth.

### Financial sector and structural reforms
- The authorities have taken steps to strengthen Kosovo’s financial safety net:
  - Adoption of a macroprudential policy framework, which the authorities are now operationalizing.
  - Work toward improving the contract enforcement system to allow for more efficient recovery of collateral and distressed assets, intended to enable the bank lending needed to bolster stronger economic growth.
- Measures to improve the business environment:
  - Intensified efforts to mobilize donor financing for major infrastructure projects under the fiscal rule’s revised investment clause.
  - Continued enhancements to the transparency and efficiency of the public procurement system.

*Source: IMF Press Release No. 17/80, March 13, 2017*

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## References

- [Mitsuhiro Furusawa](http://www.imf.org/external/np/omd/bios/mf.htm)
- [Republic of Kosovo and the IMF](http://www.imf.org/external/country/UVK/index.htm)
- [Special Drawing Rights (SDRs) -- A Factsheet](https://www.imf.org/en/about/factsheets/sheets/2023/special-drawing-rights-sdr)
- [Press Releases](https://www.imf.org/en/news/searchnews)
- [PRESS CENTER](http://presscenter.imf.org/)
- [Press Release No. 15/362](http://www.imf.org/external/np/sec/pr/2015/pr15362.htm)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2017/03/13/pr1780-imf-executive-board-completes-the-second-and-third-reviews-kosovo_