Gërxhaliu: Inflation weighing on families, wages do not cover living costs

Former President of the Kosovo Chamber of Commerce Safet Gërxhaliu said that Kosovo was facing major social and economic problems, stressing that rising inflation and prices were putting pressure on citizens’ living standards.

Gërxhaliu told Ekonomia Online that rising prices were placing a burden on families, while minimum and average wages, according to him, were not keeping pace with the cost of a normal standard of living.

“We must understand that the social situation in Kosovo is very concerning because we have become an import-dependent economy. Along with increased imports of goods, we are also importing inflation. In this regard, Kosovo is undoubtedly being harmed by the lack of genuine dialogue with the private sector, the lack of political stability, the lack of foreign investment and the lack of incentives to shift toward production,” he said.

Gërxhaliu said that inflation in Kosovo was above seven percent and that wages should be adjusted in line with price trends.

“Today, inflation is above seven percent. It is the highest inflation rate in the Western Balkans and twice as high as inflation in European Union countries. In this regard, I believe that the minimum and average wages should always be calculated in line with inflation trends and movements in our country,” he said.

As an example, he cited the increase in the price of pellets and essential goods, stressing that current wages were insufficient to cover the expenses of a family of four.

“The greatest paradox is the fact that we are entering the winter season. Last year, a ton of pellets cost around EUR 220 to EUR 240, depending on the quality, while today the same quantity costs between EUR 480 and EUR 500. Is that not the clearest evidence of the scale of inflation? Look at the price of a kilogram of coffee; look at many essential products—their prices have almost doubled. Yet current wages, whether minimum or average, cannot cover the expenses of a family of four,” he said.

According to Gërxhaliu, a family of four would need a monthly income of more than EUR 1,200 to maintain a normal standard of living. He called for a stronger focus on economic development and increasing exports.

“Under normal circumstances, a family of four needs an income of more than EUR 1,200 to live—not luxuriously, but normally—and many families do not have the means to enjoy even that level of comfort. That is why I believe it is time to strengthen dialogue in terms of public-private partnership, to make the Social and Economic Council functional and to focus decisively on the economy. A country cannot be sustained through social assistance, and Kosovo’s problems cannot be solved through equality in poverty. We need creativity, innovation and development, while economic indicators must be substantially improved, particularly by increasing exports of ‘Made in Kosovo’ products,” he said.

Gërxhaliu said that a large proportion of wages was spent on energy, household obligations and food, calling for the private sector to play a greater role in economic development.

“We must face the reality that the minimum wage is currently set at EUR 500, while the average wage is EUR 730 gross. Of that income, 40 percent goes toward energy and other essential living expenses, while the remainder is spent on food. When either the minimum or average wage is compared with and allocated to the basic needs of our families, there is genuinely very little room left for a higher standard of living. It is true that inflation is a cancerous disease for every society, including Kosovo, but the Kosovo Government must now provide state support through measures that are not social welfare measures, but measures aimed at sustainable economic development. In this regard, I believe it is time to depoliticize the economy, give the private sector a greater role and, through genuine dialogue, identify mechanisms or models for overcoming these problems and stabilizing Kosovo’s economy. There can be no social stability without economic development, just as there can be no political stability without economic development,” he said.