Economic slowdown, state intervention is required

Business representatives in the country said there is uncertainty in Kosovo`s economic growth. This is due to inflation, non-increase in salaries, non-spending of funds for capital projects, increase in energy prices, and several other factors. In this case, government intervention is being sought.

The head of the Chamber of Commerce and Industry in Kosovo, Skënder Krasniqi, said that based on field analysis it was seen that the business is not in a good condition and needs an emergency intervention, either in fiscal policies or financial support through banks or even the state, so that they do not fall or go bankrupt.

Krasniqi is considering that if the government does not intervene, the country may face economic decline.

"If the government does not urgently intervene in the fiscal policies to support businesses in the financial aspect, we will have a significant decline in the economy," he says.

The chair of the Chamber of Commerce of Kosovo, Lulzim Rafuna, mentions several factors that could lead the country to an economic slowdown. Not raising wages and increasing energy prices are additional problems that are marking the economic situation in the country.

"There may be an economic decline in the country because inflation is high among EU countries, and if it continues with this trend, it will have an impact. If the government does not spend funds on capital projects it does not help businesses that are in difficulty, does not subsidize electricity price that has increased and if it does not increase wages, these are the factors that will affect the economic decline", Rafuna said.

About three-quarters or 63% of Kosovo business representatives (CEOs) who participated in the 26th annual PwC survey believe that global economic growth will decline over the next 12 months.

23% of CEOs in Kosovo are cutting costs, and 38% are raising prices, yet 83% do not plan to reduce the number of employees and 83% do not plan to reduce compensation.

The lack of labor force/skilled workers is seen as the biggest challenge for the long-term profits of the industries for the CEOs in Kosovo, it is written in the publication.

PwC are companies that provide clients with business services including accounting, auditing, human resources consulting, etc.

However, the Central Bank of Kosovo estimates that there will be economic growth of 3 to 4% throughout the year 2023. This is mainly due to the contraction of domestic demands and the increase in imports.

CBK has predicted that there will be a decrease in inflation in the second half of the year.