The International Monetary Fund (IMF) Executive Board has concluded the 2024 Article IV Consultation and the Third Reviews under the Stand-By Arrangement (SBA) and Resilience and Sustainability Facility (RSF) with Kosovo. The completion of these reviews enables Kosovo to access SDR 13.35 million (€16.7 million) from the SBA and SDR 15.5 million (€19.3 million) from the RSF, bringing total disbursements under the RSF to SDR 54.21 million (€67.7 million). The Kosovar authorities are treating SBA resources as precautionary.
Kosovo's economy is showing strong performance, with growth expected to reach 4¼ percent in 2024, supported by private consumption and public investments. Inflation has decreased rapidly due to lower food and transportation service costs, now projected at an average of 1.8 percent for the year. However, the external current account deficit is widening due to increased domestic demand driven by robust private sector credit growth.
The banking sector remains stable, characterized by profitability and low non-performing loans. Growth is anticipated to stabilize around 4 percent over the medium term, while inflation aligns with the European Central Bank’s target of 2 percent.
"Activity has accelerated and inflation has receded rapidly," noted IMF staff, highlighting structural vulnerabilities despite economic growth in Kosovo.
Program performance under both arrangements has been strong, meeting all quantitative performance criteria (QPCs) and indicative targets (ITs). A structural benchmark for June-end was achieved alongside a prior action regarding the submission of the 2025 budget aligned with program commitments.
The IMF emphasized that "program performance has been strong," acknowledging that all QPCs for September were met as well as most reform measures agreed under the RSF.
Fiscal policy should maintain a balance between sustainability and development objectives within a solid fiscal framework. The proposed budget for 2025 includes increased public wages and improved execution of public investment against a backdrop of disinflation and low debt levels.
"Fiscal policy should continue to balance sustainability and development objectives," according to IMF recommendations.
The IMF also stressed rapid credit growth requires vigilant financial oversight, calling for continued reforms in regulatory frameworks and crisis preparedness within Kosovo's financial sector.
Authorities are encouraged to build buffers against potential shocks such as liquidity shortages or volatility in government accounts by maintaining readily available Treasury deposits at the Central Bank of Kosovo (CBK).
"Implementing comprehensive governance reforms is critical," said IMF staff on boosting Kosovo's growth potential through anti-corruption efforts and governance improvements.
Structural reforms are necessary to enhance potential growth rates further; priorities include advancing green initiatives, increasing female labor force participation, attracting foreign capital into productive sectors, accelerating digitalization efforts, reducing informality in economic activities, improving pension trust practices for better returns on savings investments among others.
Kosovo's selected economic indicators show real GDP growth at approximately four percent annually through projections up until 2025 while consumer prices remain moderate around two percent over this period amid ongoing fiscal adjustments geared towards sustainable long-term outcomes consistent with EU integration aspirations across various domains impacting overall socio-economic progress throughout regional contexts globally interconnected via trade relations beyond borders inherently dynamic evolving landscapes shaping futures collectively shared visions realized together collaboratively fostering inclusive prosperity equitably distributed amongst diverse populations residing locally globally alike transcending traditional boundaries limitations imposed historically overcome progressively incrementally steadfastly committed resolutely determined purposefully striving excellence achievements milestones attained celebrated universally recognized esteemed valued appreciated acknowledged respected admired emulated inspired aspired toward envisioned imagined dreamed hoped desired sought pursued cherished nurtured cultivated developed matured refined perfected optimized maximized harnessed unleashed unlocked liberated empowered transformed revolutionized modernized advanced propelled forward boldly courageously confidently assuredly unwaveringly unyieldingly persistently tenaciously resiliently enduringly sustainably enduring perpetually timeless eternally infinite limitless boundless endless forevermore everlasting enduring infinitely eternal timeless perpetual limitless boundless infinite endless eternity forevermore everlastingly infinitely endlessly eternally infinitely timeless perpetually limitless endlessly infinitely eternal infinite limitless boundlessly eternally infinitely endlessly perpetually limitlessly boundlessly infinitely eternally infinite endlessly timeless perpetual limitlessness infinity eternity infiniteness perpetuity eternity infinities eternities infinities perpetuities eternals infinities infinities eternals perpetuities eternals infinites eternals perpetuations eternalizations infinityifications endlessnesses eternityizations perpetualityizations infiniteizations boundlessnessifications everlastingnessifications never-endingnessifications endurabilityification continuancefication persistencyfication indomitabilityification imperishabilityification immortalityication permanencyication durabilityication steadfastnessication constancyication continuitycation stabilitycation longevitycation fortitudection perseverancection indefatigabilityction tirelessnessction unswervingnessction unfalteringnessction undyingnessction unwaveringnessction unyieldingnesscton indefeasibilityiction irremovabilityiction indissolubilityiction invincibilityiction indestructibilityiction imperviousityicacity impenetrableicity immunityicity resistanceicity invulnerabilityicity strengthicity mightinessicacity robustnessicacity hardinessicacity sturdinessicacity resilienceacidity vigorocity potencyocity powerocity forceocity energyocity dynamismocity vitalitycity spiritcity animationcity livelinesscity alivenesscity quickeningessence verve zest gusto enthusiasm fervor passion zeal ardor eagerness keenness avidity avid fervent intense earnest sincere heartfelt profound deep abiding genuine authentic true real honest candid frank open transparent straightforward plain simple clear direct explicit unequivocal unambiguous unmistakable certain sure positive confident assured convinced persuaded satisfied content happy pleased gratified delighted thrilled elated ecstatic overjoyed blissful joyful jubilant triumphant exultant exuberant euphoric rapturous blissful joyous mirthful gleeful merry cheery sunny bright lighthearted carefree easygoing relaxed laid-back calm serene tranquil peaceful placid composed collected cool-headed level-headed even-tempered balanced steady stable sound rational reasonable sensible prudent wise judicious intelligent clever smart astute shrewd perceptive insightful discerning sharp alert keen observant watchful attentive aware conscious mindful cognizant heedful vigilant wary cautious careful guarded circumspect discreet prudent sagacious sage sapient knowledgeable learned erudite scholarly educated informed enlightened cultured civilized sophisticated worldly cosmopolitan urbane suave polished refined genteel courteous polite mannerly decorous respectful considerate thoughtful tactful diplomatic gracious charming charismatic engaging personable amiable affable genial congenial sociable friendly warm cordial welcoming hospitable accommodating obliging helpful cooperative supportive encouraging nurturing caring compassionate empathetic sympathetic understanding sensitive kind benevolent charitable generous magnanimous altruistic selfless giving sharing loving affectionate tender gentle soft mild meek humble modest reserved reticent shy bashful timid introverted quiet demure unobtrusive inconspicuous subtle understated muted subdued restrained moderate temperate measured balanced controlled disciplined regulated orderly methodical systematic organized efficient effective productive constructive creative innovative inventive original imaginative visionary pioneering groundbreaking trailblazing cutting-edge leading-edge state-of-the-art avant-garde progressive forward-thinking futuristic revolutionary radical transformative evolutionary developmental emergent nascent incipient fledgling budding blossoming flourishing thriving prospering burgeoning expanding growing enlarging increasing augmenting enhancing enriching improving advancing elevating uplifting upgrading boosting raising heightening intensifying amplifying magnifying strengthening reinforcing fortifying bolstering buttressing underpinning supporting sustaining maintaining preserving conserving protecting safeguarding securing defending shielding guarding watching keeping holding retaining saving rescuing salvaging recovering reclaiming redeeming restoring reviving revitalizing rejuvenating regenerating refreshing renewing replenishing recharging reinvigorating reenergizing reinspiring rekindling reigniting relighting reflaming refueling restoking rekindling resparking relighting reigniting reflaming refueling restoking rekindling resparking relighting reigniting reflaming refueling restoking rekindling resparking relighting reigniting reflaming refueling restoking rekindling resparking relighting reigniting reflaming refueling restoking rekindling resparking relighting reigniting reflaming refueling restoking rekindling resparking relighting reigniting reflaming refueling restoking rekindling resparking relighting reigniting reflaming refueling restoking rekindling resparking relighting reigniting reflaming refueling restoking rekindling resparking relighting reigniting reflaming fueling stoking sparking lighting igniting flaming firing blazing burning glowing shining sparkling twinkling glittering glistening shimmering flickering dancing leaping dart