Working towards a new IMF program
Overview:
Elections in late 2010 saw the government pursue populist policies which pushed the IMF agreement off track. Having secured re-election, the government is now seeking to establish a record of sound economic policies with which it hopes to secure a new IMF program. The economy continues to grow at a healthy pace even if some deceleration is expected this year. Inflation is falling. The government is implementing a medium-term fiscal consolidation. The 2012 budget is consistent with this. However, more fiscal adjustment measures will be needed if the sale of Pristina Telecom (PTK) is delayed yet further as it is important that the government keeps its bank deposits above a certain minimum. Structural reforms must improve the business climate and weak export base in order to reduce a massive current account deficit.