Kosovo's current account deficit down 42.3% in 2012

By bne IntelliNews April 15, 2013

Kosovo's current account deficit narrowed 42.3% to EUR 380.2mn in 2012 on the back of rising current transfers and strong net services inflows, preliminary data released by the central bank showed. The balance of services surplus rose 30.3%, reaching EUR 346.2mn. The surplus on current transfers increased 16.8% to EUR 1.2bn in 2012, with rising transfer inflows in each quarter.

Remittances of Kosovar citizens living abroad, a major domestic demand financing source, were up 3.6% to EUR 605.6mn. The merchandise trade gap, on the other hand, widened a tiny 0.7% to EUR 2bn as the decline in exports slightly outpaced the decline in imports. As of the income balance, it rose 35.4% to EUR 154mn.

Net tourism revenue was up 31.2% to EUR 309.3mn in 2012, as a result of smaller spending abroad on tourism (down 28.1% to EUR 73mn) and larger tourism revenues (up 13.4% to EUR 382.4). Meanwhile, the net transportation deficit shrank 4.7% to EUR 50.9mn.

The capital and financial account surplus was down 67% to EUR 140mn in 2012. Net FDI dropped by 42.9% to EUR 216.3mn as a result of lower investment inflows in the country (down 41.2% to EUR 232mn). Net portfolio investment's deficit increased significantly, widening 224.6% to EUR 184.9mn. In the meantime, other investments registered a surplus of EUR 363mn, compared to a deficit of EUR 5.7mn a year earlier.

As a result, the balance of payments ended 2012 with a surplus of EUR 267.2mn, compared to a deficit of EUR 61.2mn a year earlier.

BoP (EUR mn) 2011 2012 Change y/y
Current Account -658.4 -380.2 -42.30%
Goods balance -2 059 -2 072.8 0.70%
Services balance 265.7 346.2 30.30%
Income balance 113.8 154.1 35.40%
Net current transfers 1 021.1 1 192.3 16.80%
Capital Account 42 13 -69.20%
Financial Account 377.5 127.1 -66.30%
Net FDI 378.9 216.3 -42.90%
Net Errors and Omissions 239.6 239.4 -0.10%
OVERALL BALANCE 61.2 -267.2 -536.40%
Source: CBK      

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