3% economic growth is not enough to reduce unemployment, says IMF

3% economic growth is not enough to reduce unemployment, says IMF

Pristina, March 30, 2015/Independent Balkan News Agency

By Elton Tota

3% economic growth is sustainable, but not sufficient for the creation of new jobs and reduction of unemployment.

This was declared by the head of International Monetary Fund (IMF) Jacques Miniane, who is on a two week visit to Kosovo. “We have finalized four to five crucial points during these weeks. We expect a growth of over 3% this year and this is not bad at all, better than some of the countries of the region. But, I believe that Kosovo needs a bigger growth than 3% in order to create new jobs and a greater hope for one of the youngest populations in Europe”, said Miniane.

According to him, the second conclusion relates to the fact that budget deficit may exceed the projected 2%. “In spite of the good work done by the tax and customs authorities, revenues are not increasing in line with promises. What must be done is a rebalancing of the budget as it has seen a slight deterioration in the recent years”, said Miniane.

Miniane also said that Kosovo must pay more attention to projects for hospitals. He also said that the banking sector is sustainable, but stressed that banks must increase their lending in order to back investments in the sector of production and infrastructure. Meanwhile, he said that another problem relates to the judicial system.

“Another problem has to do with the judicial system, with the large number of judicial cases and the shortages of expertise in handling financial cases. We’re happy that the government is working in this direction”, he said.

Miniane also mentioned the law on procurement and he believes that with the new law, the government offer e-procurement in order to have a transparent governing.

Meanwhile, Avdullah Hoti, minister of Finance, declared that this is the first time that Kosovo holds such consultations. “For the first time, the International Monetary Fund comes to Kosovo to hold consultations in the framework of the fourth article based on the IMF statute. We have a relatively favorable situation as far as public debt is concerned, which is very low and we have room to enter agreements with IMF and other international organizations to fund our needs”, Hoti said.

Bedri Hamza, governor of the Central Bank of Kosovo declared that sides have jointly concluded that the banking sector in Kosovo is well capitalized. He also said that there’s a growth of banks assets and deposits.

“We have growth of deposits and loans, where crediting in 2014 has been greater than in the past three years. It’s a positive thing that interest rates are falling. Although they are still high, I believe that there’s room for interest rates to be cut and for lending to grow”, he added. /ibna/