Finance

Economists ask the state to empower local businesses to fight the trade deficit

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Photo: Illustration

The high level of import and the small domestic production are seen with concern by Kosovar experts. They have blamed Kosovo's institutions for the lack of a strategy for the development of domestic production. 

In 2023, Kosovo had a negative trade balance of five billion euros. So it imported five billion euros more than it exported.

The President of the Chamber of Commerce, Lulzim Rafuna, said that this should alert the institutions.  
"Unfortunately, this is still the case, for the last two years we have had a decline in exports, and this should be a very big alarm for the Government, to see what happened and why it is happening. Where is the challenge that there is a decline in exports. The decrease in export also means a decrease in domestic production, for this reason the Government must urgently identify where the problem is and deal with the problem so as not to allow the trade deficit to grow even more. The ratio between import and export is covered by only 14 percent, which means that only 14 percent covers import with export. Meanwhile, the import is increasing both in terms of quantity and value", said Rafuna for "Ekonomia Online".

Economist Besnik Avdiaj has stated that the Government should empower local businesses.

"The trade deficit has been continuously increasing in recent years. It is normal considering the fact that we largely import consumer products from abroad. With the increase in the cost of production and other operations in this line in the supply chain, it is understandable that there is an increase in consumption, perhaps not necessarily in the real value of the amount being consumed, but an increase in the nominal value. So in terms of the income that we spend on these consumer products", said Avdiaj.

According to him, the state should work towards strengthening local businesses. He says that private businesses should be allowed to invest.

"It is difficult the fact that the cost of living and doing business in Kosovo is constantly increasing, either because of the general costs that are increasing due to prices, due to the labor market in the sense of the workforce, due to skills and other skills needed for services and other operational parts of the business that are very specific. Normally, the competition takes its toll, which to some extent has made it impossible for the 'small players' in the economy to penetrate. However, much needs to be done through the mechanisms that our institutions provide to support local production and the provision of services mainly for the purpose of export. This means that, first of all, it is necessary to cover local demand with these products and services, but also the increase in exports in a significant way would ensure sufficient revenues from abroad, which would then to some extent cover our expenses in terms of consumption abroad", said Avdiaj.