The World Bank said that Kosovo will record economic growth of 3.7 percent during 2023, until a year ago, economic growth was said to be 3.5 percent.
In the Regular Economic Report for the Western Balkans, the Bank said that the increase in the real cost of living for poor people in the Western Balkans is higher than suggested in official figures. It was emphasized there that the Kosovar economy has shown stability, despite the slowdown in growth.
"The economies of the Western Balkans have shown extraordinary resilience, despite facing extraordinary economic obstacles. To continue to weather the shocks caused by multiple economic shocks, countries can greatly benefit from continuing to implement productivity-enhancing reforms in the medium term, such as accelerating regional integration, increasing the level of market competition, attracting investment with higher quality and the easing of barriers that limit the participation, especially of women, in the labor market", said Xiaoqing Yu, director of the World Bank for the Western Balkans.
The bank said pressure from high prices could cause slower poverty reduction, despite gains made possible by government programs to cushion the effects of the crisis.
"Pressures could increase if inflation accelerates and the growth of EU economies slows beyond current expectations. In this context, it is essential to maintain sufficient reserves to respond to unexpected changes in the economic environment, stated Massimiliano Paolucci, World Bank manager for Kosovo.
"According to the report, possible factors with a limiting effect in the following periods include the decrease in external demand, which may negatively affect export earnings and reduce remittances, and the narrowing of the fiscal space, which continues to limit the support that can be offered to families," the report said.
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World Bank: Economic development in Kosovo is slowing down
The World Bank said employment shrank the most in the agriculture and public administration sectors during 2022, while a slowdown in employment growth was also seen in the industry and services sectors.
“The employment rate reached an all-time high of 47 percent in September 2022, but then began to decline. The medium-term outlook for the Western Balkans remains positive, although reforms are needed to accelerate the green transition and address key structural challenges," the Bank's report states.
