November 1 (SeeNews) - Kosovo's government has approved the 2017 draft budget with projected deficit equivalent to 1.5% of the gross domestic product (GDP), lower than the gap of 1.6% forecast for 2016.
The projected budget deficit for next year is below the limit of 2% set by the International Monetary Fund (IMF), the government said in a statement on Monday.
Total budget revenues are projected at 1.725 billion euro ($1.9 billion), which represents an increase of 6% compared to 2016, as tax revenues are expected to grow 7% to 1.5 billion euro.
Budget expenditures will reach 2 billion euro next year, which is an increase of 15% compared to the 2016 budget.
"Despite the positive trends in the last years, we have issues which we should address, and thus, in such context, it is quite normal the need for financing to be higher than our funding capabilities," finance minister Avdullah Hoti told the government, presenting the draft budget.
Avdullah Hoti said the draft was prepared considering two key objectives: to keep expenditure under control, and to focus on capital investments that will have a positive effect on Kosovo's economic development.
The government projects GDP growth of 4.4% in 2017, as compared to 4% growth forecast for 2016.
According to the draft published on the website of the finance ministry on Tuesday, capital expenditure is planned to increase to 723 million euro next year, up from 500 million in 2016.
The government said it will continue to finance the construction of the motorway that will link the capital Pristina with the border with Macedonia. The government also plans to start the construction of a motorway linking Pristina and Gjilan, in Eastern Kosovo. According to the draft budget, the government will allocate 151.9 million euro of own funds to the construction of motorways in 2017, and will also borrow 55 million euro for the same purpose.
($=0.9092 euro)