Kosovo Offered IMF Deal if it Continues Reforms

The International Monetary Fund office in Pristina has announced that an agreement has been reached with Kosovo on an economic programme that could be supported by a 22-month Stand-By Arrangement, SBA.

"The proposed access would total... about ?185 million... and the agreement is subject to approval by IMF Management and the Executive Board. Consideration by the Executive Board is expected by late July," the head of the IMF mission, Jacques Miniane, said.

The IMF mission led by Miniane visited Pristina from May 28 - June 9 to discuss an economic reform program that could be supported by a Stand-By Arrangement.

"Growth in Kosovo has remained relatively strong and resilient in recent years, driven in part by strong remittances from the diaspora. However... higher growth is needed to bring income up to the levels of neighbouring countries and provide the high-quality jobs that Kosovo needs," Miniane concluded.

Issues that need addressing, according to the IMF, are infrastructure gaps, lack of skills, high labour costs and the business environment.

The structural adjustments that will be tackled in the Stand-By Agreement include keeping public debt levels sustainable, and managing the impact of last year's pre-electoral promises, which included public-sector wage rises.

"By keeping public wages at current values, by containing spending on goods and services, and introducing revenue-enhancing efforts, space will be created for pro-growth priority expenditures. The combination of lower deficits and Fund disbursements will help return the government's cash buffers to prudent levels," the IMF Mission said.

Kosovo's Minister of Finance, Avdullah Hoti, also announced that the 2015 budget and the draft budget for 2016 would be...