IMF Autumn Report 2016: Kosovo Has Made Progress in Regional Economic Issues for CESEE

The Ministry of Finance of the Republic of Kosovo, the Kosovo Central Bank and the International Monetary Fund (IMF) today held a seminar on the autumn Report of the IMF 2016 on regional economic issues for the Central, Eastern and Southeastern Europe (CESEE).

The countries of Central, Eastern and South-Eastern Europe include: Albania, Belarus, Bosnia, Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Kosovo, Latvia, Lithuania, Macedonia, Moldova, Montenegro, Poland, Romania, Russia, Serbia, Slovakia, Slovenia and Ukraine.

This report covers issues dealing with major economic developments in the countries of Central, Eastern and South-Eastern Europe, as well as expectations for future economic developments. As such, this report is published twice a year (spring and autumn), in order to review economic developments in these countries and also on the measures to be taken to improve management of public investment and tax administration.

On the occasion of the publication of this report, the IMF in cooperation with the respective Governments made the presentation of this report in any of the countries included in the report. For this edition, it was decided the presentation to be made in Kosovo and in Lithuania. As regards Kosovo, this is the first time that this report is presented in Pristina.

The Minister of Finance Avdullah Hoti in his opening speech expressed his gratitude to the two IMF representatives who have selected Pristina to present the main findings of the report.

"Let me say that the autumn report of the IMF 2016 on regional economic issues for Central, Eastern and Southeastern Europe (CESEE), is very informative and contains extensive data on economic, fiscal and financial policies in the countries of Central, Eastern and South-Eastern Europe. Furthermore, this report discusses in detail the guidelines for the future, based on the latest projections of the IMF ", said Minister Hoti.

While in terms of the main points contained in this report with respect to Kosovo, the Minister of Finance Avdullah Hoti said that "The report rightly points to Kosovo's success in improving the quality of the loan portfolio. This shows the commitment of the CBK and all stakeholders for a better economic environment, which has also affected the quality of the loan portfolio. Kosovo ranks fairly well in terms of quality of tax administration. We, as you know, have done quite substantial reforms in terms of simplification of procedures and elimination of red tape, and it is well captured by this report. "

"Provision of online tax services is noted as one of the successes of Kosovo. Kosovo among these countries, seems to be the leader in this regard, and we will continue with an even faster pace of automation and computerization of services, “added Minister Hoti.

On this occasion, the representatives of the International Monetary Fund, Deputy Head of Division in the European Department of the International Monetary Fund Emil Stavrev and the senior economist at the International Monetary Fund Ara Stepanyan presented the findings of the report of the IMF autumn 2016 on regional economic issues for the Central, Eastern and Southeastern Europe (CESEE). In the first part of their presentation, the representatives of the International Monetary Fund presented the overview and the updated macroeconomic risks for the states of CESEE, whereas in the second part of the presentation the focus was on the main findings of research on public investment management and efficiency of tax administration in the region, in a perspective among different countries.

Deputy Head of Division in the European Department of the International Monetary Fund Emil Stavrev said that "According to the autumn report of the IMF 2016 on regional economic issues for Central, Eastern and Southeastern Europe (CESEE), the economic growth remains solid in most countries that the report covers. However, Russia's economy is still in recession, but the pace of the recession is now more moderate. Also, the Commonwealth Independent States - most former Soviet countries are gradually emerging from recession as a result of improved external demand. However, the current rate of growth is difficult to continue, due to the limited productivity growth, and the negative demographic developments. While risks are reduced, however, those remained on the horizon with the real possibility of a negative impact, as it is the case with the refugee crisis and the Brexit.

"The policy should be balanced between the medium-term growth and the re-construction of fiscal reserves, especially in those countries where growth has been better. For the entire region, the improvement of growth potential and convergence remain as challenges through structural reforms and increased productivity. Depending on the countries, the need for improving governance, improving the supply of workforce, increasing the participation rates and reducing the structural unemployment are some to mentioned, "Said the IMF representative Emil Stavrev.

He also said that "the need for economic potential and increased fiscal reserves, requires an improvement in the management of public investment and tax administration. A high quality of public investment helps improve growth potential, given that there is still a huge gap in infrastructure, compared to the developed economies. In this context, improving tax administration, results in creation of fiscal space to increase fiscal investments.

In this seminar participants were : the Minister of Finance Avdullah Hoti, the Deputy Head of Division in the European Department of the International Monetary Fund Emil Stavrev and the senior economist at the International Monetary Fund Ara Stepanyan, the Chairman of the Committee on Budget and Finance in Kosovo Assembly Safete Hadërgjonaj , the Deputy Governor of the Central Bank of Kosovo Fehmi Mehmeti, the director of Tax Administration of Kosovo Sakip Imeri, the acting director of Customs Fahri Gashi, the advisor for economics in the Office of the Prime Minister Valentin Toci, the Director General of the Agency for Investment and Enterprise Support in Kosovo Besian Mustafa, other representatives of Kosovo institutions, the representatives of international institutions in Kosovo, the representatives of the business community, groups of experts, and the representatives of civil society.