September 27 (SeeNews) - Kosovo's real GDP growth will slow down to 3.6% in 2016 from an estimated 3.9% in 2015, the World Bank said on Tuesday, confirming its June projection.
"Prolonged political instability and lack of agreement on sensitive topics such as demarcation of the border with Montenegro have started to discourage FDI", the World Bank said in its South East Europe Regular Economic Report. Private and public investment, the latter being directed mainly into road construction, have the greatest weight in the country's GDP growth.
The report covers six countries of the region (SEE6) - Albania, Bosnia, Kosovo, Macedonia, Montenegro, and Serbia.
The bank expects Kosovo's economic growth to speed up to 3.9% next year.
New lending in Kosovo grew, pushed by lower lending rates and declining NPLs (only 6.1% of all loans as of end-2015), the World Bank said.
Consumer prices are projected to stay unchanged in 2016 and to rise slightly next year.
Kosovo's current account gap is expected to continue to widen due to increased trade deficit.
Unemployment in Kosovo remains the highest in the region, the bank sadi. According to the latest available data of the Kosovo statistics office, unemployment dropped to 32.9% in 2015 from 35.3% a year earlier.
Details from the World Bank report follow:
|
2015 |
2016 |
2017 |
2018 |
Real GDP growth |
3.9 |
3.6 |
3.9 |
3.7 |
Consumer price inflation |
-0.5 |
0.0 |
0.3 |
0.5 |
Public revenues (%/GDP) |
25.4 |
26.9 |
26.6 |
26.6 |
Public expenditures (%/GDP) |
27.3 |
29.4 |
28.3 |
28.3 |
Trade balance (%/GDP) |
-30.3 |
-31.6 |
-32.1 |
-33.0 |
Remittance inflows (%/GDP) |
13.0 |
13.4 |
13.8 |
14.3 |
C/a balance (%/GDP) |
-9.1 |
-11.4 |
-12.6 |
-14.2 |
FDI inflows (%/GDP) |
5.6 |
3.7 |
4.5 |
5.2 |
External debt (%/GDP) |
33.4 |
33.9 |
34.6 |
35.1 |
Unemployment rate (%) |
32.9 |
n.a. |
n.a. |
n.a. |
sources: Kosovo authorities, World Bank estimates and projections
The other economies in the SEE6 region are expected to maintain growth of between 2.8% and 3.6% in 2016, the World Bank said.