Kosovo growth seen 5-6 % in 2010

LONDON, Nov 24 (Reuters) – Donor-reliant Kosovo will see improved economic growth in 2010 and is looking to get a sovereign credit rating, Finance Minister Ahmet Shala said on Tuesday.

He said growth was likely to rise to between 5 and 6 percent from levels above 4 percent in 2009.

“There will be a lot of investment in Kosovo from the public and private sector… many projects will start next year — I believe 2011 will be even better,” the minister told Reuters in an interview on the sidelines of a Kosovo investment forum.

Kosovo, with a population of two million, declared independence from Serbia in 2008 and joined the International Monetary Fund and the World Bank in June.

Since the end of a 1998-1999 conflict, Kosovo has received about 3 billion euros in aid and is expecting to receive another billion euros from international donors by 2011.

Kosovo, about the size of the U.S. state of Connecticut, is negotiating with the IMF for a loan of $200 to $300 million and hopes to conclude a deal soon.

Shala declined to give more details on the size of the IMF loan, but said it would be a development programme designed to boost industry.

Kosovo is looking at the possibility of issuing domestic debt next year, and Kosovo was also seeking an international credit rating, discussing this with the three major ratings agencies — Moody’s, Standard & Poor’s and Fitch.

“We are talking to all three. I think next year we should be getting a rating,” Shala said.

One speaker at the forum suggested a sub-investment grade of B minus might be appropriate for Kosovo.

“I am always more optimistic than that,” Shala said.

He said the drop in landlocked Kosovo’s exports, mostly scrap metal and timber, which look set to fall 40 percent this year from 2008, was in part due to a Serb blockade, a situation which Kosovo is seeking to resolve together with the European Commission.

“The international community, the European Commission and other countries will put some heat onto the Serbian leadership,” Shala said.

“What is going on is not at all in the European spirit of cooperation in the region.”

Reuters