GDP growth but fiscal and inflation concerns
Overview:
The economy in Kosovo has continued to grow throughout the global economic crisis. GDP growth slowed somewhat as a result of weaker exports and worker remittances but is now accelerating once more. However, lots of challenges remain both in terms of maintaining macroeconomic stability (combating rising inflation and a widening fiscal deficit) and in terms of improving the underlying structure of the economy (improving a weak export base and investing in essential infrastructure projects). The IMF advises that the authorities restrict current spending to make room for this surge in investment. However, recent populist promises ahead of parliamentary elections have gone in the opposite direction and, hence, pushed the IMF program off-track. A new government is likely to be formed next week.