Kosovo needs new loan deal with IMF, finance minister says

BELGRADE: Kosovo will need to negotiate a new deal with the International Monetary Fund to curb borrowing costs after the current one expires in summer, outgoing finance minister Avdullah Hoti told Reuters.

Hoti said one of the first tasks of the new government that will take over after the June 11 parliamentary election would be to start negotiations with the Fund.

Kosovo agreed a two-year funding deal with the IMF in July 2015 worth 184 million euros.

In March, the IMF Board approved extension of the deal to August 4 to allow sufficient time for ongoing structural reforms to progress.

“The IMF gives us credibility. Kosovo is a young country, we need to finance a lot of infrastructure projects,” Hoti said in a phone interview.

He later travelled to Brussels for a an EU- sponsored meeting of Western Balkan finance ministers.

Hoti said investing in major infrastructure projects such as railroads, regional roads and even irrigation system that would improve agriculture production is a priority for authorities.

Kosovo called a snap election after parliament dismissed the government of prime minister Isa Mustafa following a no-confidence vote.

His Democratic League of Kosovo nominated Hoti as their candidate for prime minister if they win the vote.

“We expect the government will be formed quickly after the vote ... we don’t have much time to lose,” Hoti said.

With a population of 1.8 million, Kosovo has seen high growth rates since it declared independence from Serbia in 2008.

But that has not enough to bring down the 30 per cent unemployment rate.

Last year, the economy grew 3.5 per cent and it is forecast to grow 3.6 per cent this year.

In its Kosovo country outlook in April, the World Bank said Kosovo’s medium-term growth outlook has an upside potential but needs a stable political environment and a better business climate that enables investments.

It also said near-term growth is expected to be driven by investment and consumption. — AFP