Kosovo's 2014 draft budget projects prudent public finances - IMF

By bne IntelliNews November 19, 2013

Kosovo draft budget for next year, pending approval by the assembly, is consistent with sound fiscal management, IMF's mission chief for Kosovo, Johannes Wiegand, said in a statement after the discussions on the fifth and final review of the country’s economic performance under its Stand-By Arrangement (SBA). 

Kosovo's government has said it will target a budget deficit of 2% of GDP in 2014, equal to EUR 132mn in absolute terms.

The IMF mission, which visited Pristina in the period of Nov 6-18, reached a staff-level agreement on a package of policies that aims at completing the fifth review under the SBA. The Fund's executive board will announce its consideration in mid-December.

All end-August quantitative performance criteria have been met, Wiegand noted. A shortfall in revenue collection has been more than compensated by spending cuts. Particularly affected were capital expenditures, he explained.

The completion of the fifth review will enable Kosovo to draw SDR 4.251 million (EUR 5mn). The government, however, does not intend to withdraw these funds at this point and will rather treat the agreement with the IMF as precautionary in 2013.

The proposed budget for 2014 projects an allocation to start the construction of highway R6 to Skopje, while keeping the government's bank balance at an adequate level, the IMF noted.

In its latest World Economic Outlook (WEO) report from October, the IMF projected Kosovo's economic growth to quicken to 2.6% this year and to 4.2% in 2014 from last year’s 2.3%.

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