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Prishtinë, 27 November 2013 – As part of the fifth and final review of the Kosovo’s economic performance under the Stand-By Arrangement (SBA), an International Monetary Fund (IMF) mission, held discussions with the Kosovar authorities during November 6-18, 2013.
Kosovo’s economy has continued a pattern of subdued but resilient growth in 2013, says IMF. For 2014, IMF staff projects a recovery of real GDP growth to around 4 percent, in line with developments in Diaspora host countries.
Inflation remains contained. The banking system continues to be stable and liquid. Risks ahead relate in particular to the uncertain external environment.
“Macroeconomic and financial policies have remained broadly on track. All end-August quantitative performance criteria were met, as a shortfall in revenue collection was overcompensated by spending restraint, notably on the capital budget. Good progress has also been made regarding the applicable structural benchmarks. In particular, the 2014 budget submitted to the assembly at end-October is consistent with sound fiscal management. Among other things, it includes an allocation to start construction of highway R6 to Skopje, and a public sector wage increase that can be sustained both in 2014 and in future years. The budget also safeguards an adequate level of the government bank balance.”
“In the past 2½ years, Kosovo has made significant progress in strengthening macroeconomic management. A sustainable fiscal stance has been restored and locked in with the passage of a rules-based fiscal framework in July 2013, progress has been made with the preparation and costing of spending initiatives, and the central bank has acquired stronger tools to supervise and regulate the financial system, as well as provide liquidity assistance to banks if needed. The authorities have expressed interest in a successor arrangement once this SBA expires.”
IMF