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Dec 15, 2017 14:04 EEST
PRISTINA (Kosovo), December 15 (SeeNews) – The International Monetary Fund (IMF) said Kosovo has strengthened economic growth, but weak competitiveness and governance, informality, low labour force participation and high unemployment rates continue to constrain growth potential.
“Kosovo has made significant progress during the last years, including under the recent Stand-by Arrangements in ensuring fiscal discipline, strengthening the health and resilience of the financial sector, and enhancing growth,” IMF said late on Wednesday after concluding 2017 Article IV Consultation.
Kosovo's economic growth is expected to reach 4.1% in 2017, among the highest in the region, led by high investment and exports, the statement said, adding that continued growth in remittance inflows and bank lending also give support to this development.
The IMF also said that Kosovo's authorities should focus on reforms to improve competitiveness to close the gap, reduce income inequality, and achieve stronger and more inclusive growth.
The medium-term outlook is favourable but subject to risks, the IMF said, adding economic growth could surpass 4% if the country starts the implementation of planned new power plant project Kosova e Re and push reforms.
“However, risks to political stability could undermine confidence and halt reforms. Also social spending pressures could crowd out productive spending. Furthermore, dependency on remittances continues to leave Kosovo vulnerable to potential external shocks,” the statement reads.
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