IMF warns political deadlock could choke Kosovo growth
The IMF says a prolonged institutional crisis could damage investor confidence and slow growth in Kosovo.
PRISTINA — The International Monetary Fund has warned that another political deadlock in Kosovo could bring uncertainty and slow economic growth, Nacionale reports.
According to the outlet, IMF representatives have stressed in recent communications with Kosovo institutions that political stability is a precondition for maintaining investor confidence and implementing fiscal reforms.
The assessment lands precisely as parties are in a frenzy of negotiations over the country’s next head of state, while a scenario of fresh parliamentary elections within weeks could push important reforms into oblivion.
Sectors at risk
The banking sector, foreign direct investment, and the pace of capital spending are among the areas most sensitive to political uncertainty, according to analyses cited by Nacionale. The institutional impasse could also delay the release of EU funds under the Western Balkans Growth Plan.
The European Union itself, Nacionale reports, has already released the first 61.8 million euros under that plan, but further disbursement depends on meeting criteria and on having a functioning government.
According to the IMF message relayed by Nacionale, Kosovo risks a “braking of economic growth” if political uncertainty continues to dominate the agenda of the country’s institutions.
Economists in Pristina estimate that the financial losses from early elections cannot be measured only by the direct costs of the process, but also by the negative effect on investments awaiting clarity about the institutional future.
Source: Nacionale