The Board of International Monetary Fund (IMF) enables Kosovo the access to financing of €100 million


At the joint press conference, the Governor of the Central Bank of the Republic of Kosovo Mr. Bedri Hamza, Minister of Finance Mr. Avdullah Hoti and the Head of the International Monetary Fund in Kosovo Mr. Ruud Vermeulen, announced the approval of the second and third review of the SBA program with Kosovo by the International Monetary Fund Board. This decision came after reviewing the Kosovo state performance in financial terms during 2016. In his address to media, the Governor of the Central Bank of the Republic of Kosovo Mr. Bedri Hamza emphasized the achievements in the financial sector, considering as positive the performance of the banking sector and indicators recorded in deposits and loans. According to Governor Hamza, "Credit growth in the last year, for the first time, exceeded the 10 percent. This is an indication that crediting is one of the important factors in economic growth in the country. Deposits increased to 8.4 percent whereas the non-performing loans recorded the lowest level in the last five years at 4.8 percent by the end of 2016", stated among others Governor Hamza in today’s conference. The Minister of Finance, Mr. Avdullah Hoti after thanking the positive review by the IMF Board stated that the successful implementation of structural reforms in public finance management and the achievement of fiscal targets that support economic sustainability has resulted yesterday, on March 13, with a successful approval of the second and third review of the program by the IMF Board. This allowed Kosovo to access to direct budget financing of EUR100 million. The disbursement of this funding, along with EUR 72 million already disbursed in the earliest stages of the program (or 172 million in total), has given to Kosovo the possibility to ambitious policy implementation of economic development without compromising the domestic macro fiscal stability at no moment.

Mr. Ruud Vermeulen, the IMF resident representative to Kosovo mentioned criteria met by Kosovo which enables Kosovo to reimburse about €100 million additional funds, which are intended as budget revenues. “Yesterday, the Board of the International Monetary Fund completed the second and third review of the program and estimated that criteria have been satisfactorily fulfilled, which resulted in disbursement of EUR100 million, which would bring the disbursement of about €172 million of the total disbursements to about €184 million.” According to him, Kosovo continues to have the highest economic growth in the region, but a greater increase is needed to reduce the unemployment rate. Again, according to him, this year it is expected an economic growth of 3 to 4 percent, which is above the average of the region countries.
Minister Hoti, mentioned that before the Review of the Second and Third Program in 2016 and 2017 that yesterday resulted in additional funding of EUR 100 million, the following measures were taken: In February 2016, the Assembly of Kosovo nominated names for the empty seats to the Board of Public Procurement Review Body (BPPRB).In March 2016, the Government of Kosovo established the rule for setting salaries in the public sector in accordance with the country's economic growth, as part of amendments to the LPFMA. In March 2016, as part of amendments to the LPFMA, the Government of Kosovo has created the "clause for investments", a rule that extends the options for increasing the budget, but at the same time limits the budget increase only by favorable funding and capital investments with economic development character. In March 2016, the Government of Kosovo has also approved the draft law that makes e-procurement mandatory for all central government agencies. In March 2016, the Government of Kosovo has approved a detailed concept paper with a list of new capital projects that will be funded by the International Financial Institutions. In October 2016 and in February 2017, the Kosovo Government expanded the list of goods and services for joint/ centralized procurement. In October 2016, as part of centralized procurement, contracts were awarded to 43 central government institutions and agencies for fuel, office supplies and plane tickets. In December 2016, upon the proposal of the Government, the Assembly of Kosovo adopted the 2017 budget in line with policies and parameters that the government has determined by the program of the IMF and the Assembly of Kosovo has adopted amendments to the Law on War Veterans that provide a sustainable funding mechanism for veterans' benefits. Other program commitments are also met which is worth noting the amendment to the Law on the CBK, which was approved last week by the Assembly of Kosovo, according to the IMF proposals. Minister Hoti also said that the relevant institutions of the Republic of Kosovo have already started to implement the criteria that are foreseen to be met by the Fourth Review of the Program. The Government of the Republic of Kosovo is committed to fulfill all obligations arising from this Agreement, given the great importance that the implementation has for our country and to maintaining financial stability.