Kosovo is the poorest in Europe, with unemployment and a trade deficit of four billion euros

The latest data from the World Bank show that in Kosovo over 23 percent of citizens live in poverty, Zeri reports.

According to the data of the Kosovo Agency for Statistics (ASK), the unemployment rate in Kosovo in the first quarter of 2022 was 16.6 percent, while data for the entire year 2021 show that the unemployment rate was over 20 percent.

Nagip Skenderi, professor of macroeconomics and business environment at the University of Pristina, says that with the data on unemployment and poverty, Kosovo cannot boast of economic growth, although the government often emphasizes "excellent economic indicators".

"Although we have a symbolic economic growth, it is not one that deals with the economic and social problems in Kosovo and that would improve the economic condition of citizens who are also affected by high inflation," Skenderi said, according to Zeri.

Last week's data from the European Bank for Reconstruction and Development (EBRD) showed that Kosovo will have an economic growth of 3.5 percent this year, and up to four percent next year, but, despite this, economists warn of a generally bad situation, unemployment, and poverty, which makes Kosovo the poorest in Europe.

In order to alleviate these economic and social problems that Kosovo has, it is estimated that the economic growth should be double-digit and that this trend should be maintained for many years.

Nagip Skenderi says that where inflation is in double digits, big problems are created in the economy.

"The monthly consumer basket is getting worse every day. That's the biggest problem," he emphasizes.

The average inflation rate in 2022 was almost 12 percent.

Skenderi says that the reason that Kosovo has economic growth is "the money that the diaspora sends and the expenses they incur during their stay in Kosovo."

According to data from the Central Bank of Kosovo, foreign remittances reached a value of over 1.2 billion euros last year alone.

"In addition to remittances, the growth of the construction sector, compared to the countries of the region, also had a great impact. This sector also progressed due to the diaspora, who buy and build houses in Kosovo," Skenderi says.

For more sustainable economic growth, Professor Skenderi says that another model of the economy should be devised.

"In order to have sustainable economic growth, the Government of Kosovo should focus on changing the economic structure. We should direct stimulating measures in the direction of the production sector. All our money goes to imports, to things that we can produce ourselves. Economic incentives should be aimed at the production sector, agriculture," Skenderi says.

With the high trade deficit that Kosovo has, adds Skenderi, the economy can hardly develop.

The former governor of the Central Bank of Kosovo, Fehmi Mehmeti, warned in a January interview with RFE/RL that the trade deficit negatively affected Kosovo's economic activity. Kosovo imports most of its products from neighboring countries and those from the European Union.

According to ASK data, in 2022, Kosovo exported products worth over 900 million euros, while it imported products worth over five billion euros. Consequently, Kosovo's trade deficit in 2022 reached over four billion euros.