“Program implementation remains on track, with all end-December 2023 quantitative targets met and good progress in advancing the agreed structural reform agenda,” the IMF staff team said in an end-of mission press release on Thursday.
An IMF mission, led by Sebastian Sosa, visited Pristina during March 18 - 27 to hold discussions on the second reviews of Kosovo’s SBA and RSF. The staff-level agreement is subject to approval by the IMF executive board, expected to be considered in the second half of May.
An additional 16.34 million euro could be made available under the existing 24-month precautionary SBA of about 100 million euro approved in May last year. Additionally, an extra 9.47 million euro will be allocated to the Resilience and Sustainability Facility (RSF), originally amounting to 78 million euro. The authorities have said they intend to continue treating the SBA as precautionary, the IMF said.
The standby arrangement aims to offer liquidity during potential crises and back structural reforms for fiscal and financial improvement, while the RSF seeks to provide accessible funding to advance Kosovo's climate initiatives, particularly in energy efficiency and sustainable electricity, aligning with the country's Energy Strategy for 2023–32, the IMF said earlier.
The IMF staff expects Kosovo’s economy to grow by 3.8% in 2024, maintaining projections made in October edition of its World Economic Outlook report.
The country has shown economic resilience with a 3.3% Gross Domestic Product (GDP) growth in 2023, whereas inflation slowed down to 2.2% year-on-year in February, the IMF mission said.
“Risks to Kosovo’s economic outlook include commodity price spikes due to geopolitical tensions, weaker activity in advanced European economies, and an escalation of tensions in northern Kosovo. On the upside, substantial progress in the dialogue with Serbia and the EU accession process could boost confidence, FDI, tourism, donor financial support, and growth," the IMF said.
