Title Page
REPUBLIC OF KOSOVO
SECOND REVIEWS UNDER THE STAND-BY ARRANGEMENT AND THE ARRANGEMENT UNDER THE RESILIENCE AND SUSTAINABILITY FACILITY AND REQUEST FOR MODIFICATION OF REFORM MEASURE—INFORMATIONAL ANNEX
May 14, 2024
Prepared By
The European Department
(In consultation with other departments)
Contents
FUND RELATIONS
RELATIONS TO OTHER INTERNATIONAL FINANCIAL INSTITUTIONS
STATISTICAL ISSUES
Fund Relations
(As of March 31, 2024)
Membership Status:
Joined: June 29, 2009; Article XIV.
General Resources Account: | SDR Million | Percent Quota | ||
82.60 |
100.00 |
|||
88.35 |
106.96 |
|||
|
20.07 |
24.29 |
|||
|
SDR Department: |
SDR Million |
Percent Allocation | ||
|
134.54 |
100.00 | |||
|
124.73 |
92.71 | |||
|
Outstanding Purchases and Loans: |
SDR Million |
Percent Quota | ||
|
Emergency Assistance1 |
25.81 |
31.25 | ||
|
RSF Arrangements |
30.98 |
37.50 | ||
|
Latest Financial Arrangements: | ||||
|
Arrangements: | ||||
|
Date of |
Expiration |
Amount |
Amount | |
|
Type |
Arrangement |
Date |
Approved |
Drawn |
|
(SDR Million) |
(SDR Million) | |||
|
RSF |
May 25, 2023 |
May 24, 2025 |
61.95 |
30.98 |
|
Stand-By |
May 25, 2023 |
May 24, 2025 |
80.12 |
0.00 |
|
Stand-By |
July 29, 2015 |
August 04, 2017 |
147.50 |
135.40 |
|
Outright Loans: | ||||
|
Date of |
Expiration |
Amount |
Amount | |
|
Type |
Arrangement |
Date |
Approved |
Drawn |
|
(SDR Million) |
(SDR Million) | |||
|
RFI |
Apr 10, 2020 |
Apr 15, 2020 |
41.30 |
41.30 |
General Resources Account: | SDR Million | Percent Quota | ||
82.60 |
100.00 |
|||
88.35 |
106.96 |
|||
|
20.07 |
24.29 |
|||
|
SDR Department: |
SDR Million |
Percent Allocation | ||
|
134.54 |
100.00 | |||
|
124.73 |
92.71 | |||
|
Outstanding Purchases and Loans: |
SDR Million |
Percent Quota | ||
|
Emergency Assistance1 |
25.81 |
31.25 | ||
|
RSF Arrangements |
30.98 |
37.50 | ||
|
Latest Financial Arrangements: | ||||
|
Arrangements: | ||||
|
Date of |
Expiration |
Amount |
Amount | |
|
Type |
Arrangement |
Date |
Approved |
Drawn |
|
(SDR Million) |
(SDR Million) | |||
|
RSF |
May 25, 2023 |
May 24, 2025 |
61.95 |
30.98 |
|
Stand-By |
May 25, 2023 |
May 24, 2025 |
80.12 |
0.00 |
|
Stand-By |
July 29, 2015 |
August 04, 2017 |
147.50 |
135.40 |
|
Outright Loans: | ||||
|
Date of |
Expiration |
Amount |
Amount | |
|
Type |
Arrangement |
Date |
Approved |
Drawn |
|
(SDR Million) |
(SDR Million) | |||
|
RFI |
Apr 10, 2020 |
Apr 15, 2020 |
41.30 |
41.30 |
Overdue Obligations and Projected Payments to Fund2
(SDR Million; based on existing use of resources and present holdings of SDRs):
Forthcoming | |||||
|
2024 |
2025 |
2026 |
2027 |
2028 | |
|
Principal |
15.49 |
10.33 | |||
|
Charges/Interest |
2.23 |
2.15 |
1.97 |
1.97 |
1.97 |
|
Total |
17.72 |
12.47 |
1.97 |
1.97 |
1.97 |
Forthcoming | |||||
|
2024 |
2025 |
2026 |
2027 |
2028 | |
|
Principal |
15.49 |
10.33 | |||
|
Charges/Interest |
2.23 |
2.15 |
1.97 |
1.97 |
1.97 |
|
Total |
17.72 |
12.47 |
1.97 |
1.97 |
1.97 |
Implementation of HIPC Initiative: Not Applicable
Implementation of Multilateral Debt Relief Initiative (MDRI): Not Applicable
Implementation of Catastrophe Containment and Relief (CCR): Not Applicable
As of February 4, 2015, the Post-Catastrophe Debt Relief T rust has been transformed to the Catastrophe Containment and Relief (CCR) Trust.
Safeguards Assessments
The 2023 safeguards assessment, conducted in connection with the Stand-By Arrangement and a Resilience and Sustainability Facility arrangement for Kosovo and approved by the IMF Executive Board in May 2023, found that the CBK continues to maintain robust internal controls in its operations and financial reporting. Financial reporting and external audit arrangements are broadly aligned with international standards, as is internal audit. The CBK has robust controls over its central banking operation. Strengthening of the risk management and cybersecurity is ongoing.
Exchange Rate Arrangements
The de jure and de facto exchange rate arrangements are no separate legal tender. Since unilateral adoption of the euro, this currency is a legal tender in Kosovo. Kosovo is not part of the euro area and the CBK is not part of the European System of Central Banks. Kosovo has accepted the obligations of Article VIII Section 2(a), 3, and 4 of the IMF's Articles of Agreement and maintains an exchange system that is free of multiple currency practices and restrictions on making of payments and transfers for current international transactions, except for restrictions maintained solely for reasons of international or national security, which have been notified to the Fund pursuant to Decision No. 144.
Article IV Consultation
The last Article IV consultation was concluded on January 25, 2023. As Kosovo is currently under an IMF-supported financial arrangement, Article IV Consultations are under the 24-months cycle. The next consultation is expected to happen together with the Third reviews of the SBA-RSF arrangements.
FSAP and ROSC Participation
An FSAP mission was conducted during September 19-October 2, 2012. The FSSA included the ROSC for compliance with Basel Core Principles. Kosovo has not had a data or a fiscal transparency ROSC. A FSSR mission was completed in May 2019 with a follow-up mission completed in January 2023, with specific focus on CBK governance.
Technical Assistance
Since 1999, the Fund has provided technical assistance and policy advice to UNMIK and, since September 2008, to Kosovo. Technical assistance has centered on the Fund's core competencies, notably in the areas of fiscal policy, the banking and payments systems, and macroeconomic statistics. Assistance has also contributed to developing key aspects of the legal and institutional framework needed for a market economy. More recently, TA has been provided on the following issues:
Statistics
Residential Property Price Index (June 2023); National Account Statistics (November 2023); follow-up mission on National Account Statistics (planned on August 2024); follow-up mission on Residential Property Price Index (planned on FY 2025); SDSS Workshop (planned on June 2024).
Fiscal Sector
Fiscal Risk Management (March 2022); POE Fiscal Risk Management (July 2022); Taxpayer Compliance Risk Management (November 2022); Revenue Administration Workshop (February-March 2023); Public Investment Management Assessment Update and Climate PIMA (May 2023); Safeguards Assessment (June 2023); Developing a Cash Forecasting Framework (July 2023); Tax Audit Community of Practice (September 2023); Development of Data Analytics Capacity in Support of Compliance Risk Management (September-October 2023); Government Finance Statistics (February 2024); FRAT and FRS Training (March 2024); RA: Developing a blueprint for capturing, transformation, and integration of data to design a modern data warehouse (May 2024).
Monetary and Financial Sectors
CBK Governance (July-April 2021); Development of Supervisory Methodologies and Manual for Internal Capital Adequacy Assessment Process (September-October 2021); Insurance Regulation and Supervision (June 2022); Follow up Technical Assistance on Insurance Regulation and Supervision (January 2024); the CBK Board Workshop (July 2023 and June 2024); Risk Management (March 2024); FX Reserve Management (March-April 2024);
Resident Representative
Mr. Sebastian Sosa, Regional Resident Representative for the Western Balkans, based in Vienna, took up his post on September 1, 2023, and oversees Kosovo's local office.
Relations to Other International Financial Institutions
European Investment Bank: Kosovo and the EIB
World Bank: https://www.worldbank.org/en/country/kosovo/overview
Statistical Issues
I. Assessment of Data Adequacy for Surveillance General: Data provision is adequate for surveillance. However, the Kosovo Agency of Statistics (KAS) still experiences shortages of financial and human resources. National Accounts: Through intensive TA from the European Commission (Twinning Project), improvements have been made to the national accounts, but significant challenges remain. Compilation methods used for annual national accounts (ANA) are broadly in line with the 2008 SNA/ESA2010. The quality and timeliness of annual nominal and real GDP data has been improved, and data on GDP by economic activity and by expenditure are now published simultaneously in an excel format on the website of the Kosovo Statistical Agency with a lag of 10 months. Although quarterly national accounts series provide a first estimate of the annual GDP by April every year, it would be advisable to further reduce the time lag in the dissemination of ANA. Quarterly GDP data can be inconsistent with annual data (upon publication), requiring significant revisions, and improvements in methodology are required. Kosovo needs to improve existing and develop additional high-frequency (monthly) indicators, with priority given to indicators relevant to Kosovo's economy such as wholesale and retail trade data and services. In December 2023, the Kosovo Statistics Agency has released the experimental data of the GDP by income approach for period 2021-2022, and the experimental data of GDP by statistical regions. Labor Markets: Producing reliable labor force data is challenging given the large share of the informal economy, although quarterly labor data has been published since 2016. Publication of quarterly labor market statistics is done with a 3-quarter lag. Consumer Price Index: A monthly Consumer Price Index (CPI) has been produced since 2002 and is published monthly (with a 13-day lag). The index uses a Classification of Individual Consumption according to Purpose (COICOP)-compatible item classification with 352 elementary aggregates. A new index was introduced in December 2014, with new weights largely based on National Accounts data aimed at bringing the CPI in line with the European Harmonized Index of Consumer Prices (HICP). It targets all products and services purchased by all households (resident and non-resident) in Kosovo. HICP is now available from January 2010 onward. The HICP was rebased from 2002 to 2015 in January 2016. Both CPI and HICP are used to measure consumer inflation, the latter enabling comparisons between member states within the EU. Kosovo receives TA from Eurostat. Government Finance Statistics (GFS): Monthly reports on budget execution of the general government (central government and municipalities) on a cash basis are provided five weeks after the end of each month. GFS are broadly compiled following the GFSM 2014 framework, but they still do not cover the extrabudgetary units' data. In addition, the budget classification is not consistent with the GFSM 2014 because: (i) data is on cash basis, not accrual; (ii) lending for | |
|
policy purposes (similar to subsidies) is included after calculating the primary balance; (iii) capital transfers should be included in current expenditure instead of capital expenditure; (iv) memorandum of understanding (MOU) should be properly classified depending on their final purpose; and (v) annual budget documents should specify both current and capital spending related to individual projects. While data is generally adequate, strengthening monitoring and disclosure of arrears will be important. | |
|
Monetary and Financial Statistics: Monetary data are compiled broadly consistent with the IMF's Monetary and Financial Statistics Manual and Compilation Guide 2016 (MFSMCG). The CBK reports monetary data on a monthly and timely basis, using Standardized Report Forms for the central bank, other depository corporations, and other financial corporations, which are published in the International Financial Statistics. Due to difficulties with obtaining adequate source data needed for estimation of Euro currency in circulation, the CBK ceased compiling currency in circulation in 2006, underreporting broad money. The CBK reports some series of the Financial Access Survey, including the two indicators adopted by the UN to monitor Target 8.10 of the Sustainable Development Goals (commercial bank branches per 100,000 adults and ATMs per 100,000 adults). | |
|
Financial Sector Surveillance: The CBK reports Financial Soundness Indicators (FSIs) monthly prior to 2019 and quarterly thereafter, according to the Financial Soundness Indicators Compilation Guide. 7 core FSIs and 10 encouraged FSIs for deposit takers are available through the IMF's FSI webpage. | |
|
External Sector Statistics: CBK provides to STA quarterly balance of payments and international investment position data following the sixth edition of the Balance of Payments and International Investment Position Manual (BPM6) staring with 2013: Q1 reference data. Authorities also participate in: a) the Coordinated Direct Investment Survey with inward and outward data starting with 2010; b) the Coordinated Portfolio Investment Survey with annual data starting from December 2010 and semiannual data starting from June 2013, including encouraged items (currency of denomination, sector of the holder, sector of the issuer, and cross-sector classification); and the Quarterly External Debt Statistics. Direction of trade data are available on a monthly basis. Overall, the accuracy, periodicity, and timeliness of external sector statistics have improved in recent years. The authorities are currently working towards reporting the international reserves and foreign currency liquidity template. | |
|
II. Data Standards and Quality | |
|
The country participates in the enhanced General Data Dissemination System (e-GDDS) and a National Summary Data Page regularly disseminates e-GDDS data to the public since May 11, 2017. |
Kosovo has not had a Data ROSC. |
I. Assessment of Data Adequacy for Surveillance General: Data provision is adequate for surveillance. However, the Kosovo Agency of Statistics (KAS) still experiences shortages of financial and human resources. National Accounts: Through intensive TA from the European Commission (Twinning Project), improvements have been made to the national accounts, but significant challenges remain. Compilation methods used for annual national accounts (ANA) are broadly in line with the 2008 SNA/ESA2010. The quality and timeliness of annual nominal and real GDP data has been improved, and data on GDP by economic activity and by expenditure are now published simultaneously in an excel format on the website of the Kosovo Statistical Agency with a lag of 10 months. Although quarterly national accounts series provide a first estimate of the annual GDP by April every year, it would be advisable to further reduce the time lag in the dissemination of ANA. Quarterly GDP data can be inconsistent with annual data (upon publication), requiring significant revisions, and improvements in methodology are required. Kosovo needs to improve existing and develop additional high-frequency (monthly) indicators, with priority given to indicators relevant to Kosovo's economy such as wholesale and retail trade data and services. In December 2023, the Kosovo Statistics Agency has released the experimental data of the GDP by income approach for period 2021-2022, and the experimental data of GDP by statistical regions. Labor Markets: Producing reliable labor force data is challenging given the large share of the informal economy, although quarterly labor data has been published since 2016. Publication of quarterly labor market statistics is done with a 3-quarter lag. Consumer Price Index: A monthly Consumer Price Index (CPI) has been produced since 2002 and is published monthly (with a 13-day lag). The index uses a Classification of Individual Consumption according to Purpose (COICOP)-compatible item classification with 352 elementary aggregates. A new index was introduced in December 2014, with new weights largely based on National Accounts data aimed at bringing the CPI in line with the European Harmonized Index of Consumer Prices (HICP). It targets all products and services purchased by all households (resident and non-resident) in Kosovo. HICP is now available from January 2010 onward. The HICP was rebased from 2002 to 2015 in January 2016. Both CPI and HICP are used to measure consumer inflation, the latter enabling comparisons between member states within the EU. Kosovo receives TA from Eurostat. Government Finance Statistics (GFS): Monthly reports on budget execution of the general government (central government and municipalities) on a cash basis are provided five weeks after the end of each month. GFS are broadly compiled following the GFSM 2014 framework, but they still do not cover the extrabudgetary units' data. In addition, the budget classification is not consistent with the GFSM 2014 because: (i) data is on cash basis, not accrual; (ii) lending for | |
|
policy purposes (similar to subsidies) is included after calculating the primary balance; (iii) capital transfers should be included in current expenditure instead of capital expenditure; (iv) memorandum of understanding (MOU) should be properly classified depending on their final purpose; and (v) annual budget documents should specify both current and capital spending related to individual projects. While data is generally adequate, strengthening monitoring and disclosure of arrears will be important. | |
|
Monetary and Financial Statistics: Monetary data are compiled broadly consistent with the IMF's Monetary and Financial Statistics Manual and Compilation Guide 2016 (MFSMCG). The CBK reports monetary data on a monthly and timely basis, using Standardized Report Forms for the central bank, other depository corporations, and other financial corporations, which are published in the International Financial Statistics. Due to difficulties with obtaining adequate source data needed for estimation of Euro currency in circulation, the CBK ceased compiling currency in circulation in 2006, underreporting broad money. The CBK reports some series of the Financial Access Survey, including the two indicators adopted by the UN to monitor Target 8.10 of the Sustainable Development Goals (commercial bank branches per 100,000 adults and ATMs per 100,000 adults). | |
|
Financial Sector Surveillance: The CBK reports Financial Soundness Indicators (FSIs) monthly prior to 2019 and quarterly thereafter, according to the Financial Soundness Indicators Compilation Guide. 7 core FSIs and 10 encouraged FSIs for deposit takers are available through the IMF's FSI webpage. | |
|
External Sector Statistics: CBK provides to STA quarterly balance of payments and international investment position data following the sixth edition of the Balance of Payments and International Investment Position Manual (BPM6) staring with 2013: Q1 reference data. Authorities also participate in: a) the Coordinated Direct Investment Survey with inward and outward data starting with 2010; b) the Coordinated Portfolio Investment Survey with annual data starting from December 2010 and semiannual data starting from June 2013, including encouraged items (currency of denomination, sector of the holder, sector of the issuer, and cross-sector classification); and the Quarterly External Debt Statistics. Direction of trade data are available on a monthly basis. Overall, the accuracy, periodicity, and timeliness of external sector statistics have improved in recent years. The authorities are currently working towards reporting the international reserves and foreign currency liquidity template. | |
|
II. Data Standards and Quality | |
|
The country participates in the enhanced General Data Dissemination System (e-GDDS) and a National Summary Data Page regularly disseminates e-GDDS data to the public since May 11, 2017. |
Kosovo has not had a Data ROSC. |
Kosovo—Table of Common Indicators Required for Surveillance
(As of April 10, 2024)
Kosovo—Table of Common Indicators Required for Surveillance
(As of April 10, 2024)
|
Date of Latest Observation |
Date Received/ Reported Online |
Frequency of Data7 |
Frequency of Reporting7 |
Frequency of Publication7 | |
|---|---|---|---|---|---|
|
Exchange Rates |
Feb/2024 |
Mar/2024 |
D |
D |
D |
|
International Reserve Assets and Reserve Liabilities of the Monetary Authorities1 |
Mar/2024 |
Apr/2024 |
M |
M |
M |
|
Reserve/Base Money |
Feb/2024 |
Mar/2024 |
M |
M |
M |
|
Broad Money |
Feb/2024 |
Mar/2024 |
M |
M |
M |
|
Central Bank Balance Sheet1 |
Feb/2024 |
Mar/2024 |
M |
M |
M |
|
Consolidated Balance Sheet of the Banking System |
Feb/2024 |
Mar/2024 |
M |
M |
M |
|
Interest Rates2 |
Feb/2024 |
Mar/2024 |
M |
M |
M |
|
Consumer Price Index |
Jan/2024 |
Feb/2024 |
M |
M |
M |
|
Revenue, Expenditure, Balance and Composition of Financing3—General Government4 |
M2/2024 |
April/2024 |
M |
M |
M |
|
Revenue, Expenditure, Balance and Composition of Financing3—Central Government |
M2/2024 |
April/2024 |
M |
M |
M |
|
Stocks of Central Government and Central Government-Guaranteed Debt5 |
Q4/2023 |
Feb/2024 |
Q |
Q |
Q |
|
External Current Account Balance |
Jan/2024 |
Mar/2024 |
M |
M |
M |
|
Exports and Imports of Goods |
Jan/2024 |
Mar/2024 |
M |
M |
M |
|
GDP/GNP8 |
Q4/2023 |
Mar/2024 |
Q |
Q |
Q |
|
Gross External Debt |
Q4/2023 |
Mar/2024 |
Q |
Q |
Q |
|
International Investment Position6 |
Q4/2023 |
Mar/2024 |
Q |
Q |
Q |
Kosovo—Table of Common Indicators Required for Surveillance
(As of April 10, 2024)
|
Date of Latest Observation |
Date Received/ Reported Online |
Frequency of Data7 |
Frequency of Reporting7 |
Frequency of Publication7 | |
|---|---|---|---|---|---|
|
Exchange Rates |
Feb/2024 |
Mar/2024 |
D |
D |
D |
|
International Reserve Assets and Reserve Liabilities of the Monetary Authorities1 |
Mar/2024 |
Apr/2024 |
M |
M |
M |
|
Reserve/Base Money |
Feb/2024 |
Mar/2024 |
M |
M |
M |
|
Broad Money |
Feb/2024 |
Mar/2024 |
M |
M |
M |
|
Central Bank Balance Sheet1 |
Feb/2024 |
Mar/2024 |
M |
M |
M |
|
Consolidated Balance Sheet of the Banking System |
Feb/2024 |
Mar/2024 |
M |
M |
M |
|
Interest Rates2 |
Feb/2024 |
Mar/2024 |
M |
M |
M |
|
Consumer Price Index |
Jan/2024 |
Feb/2024 |
M |
M |
M |
|
Revenue, Expenditure, Balance and Composition of Financing3—General Government4 |
M2/2024 |
April/2024 |
M |
M |
M |
|
Revenue, Expenditure, Balance and Composition of Financing3—Central Government |
M2/2024 |
April/2024 |
M |
M |
M |
|
Stocks of Central Government and Central Government-Guaranteed Debt5 |
Q4/2023 |
Feb/2024 |
Q |
Q |
Q |
|
External Current Account Balance |
Jan/2024 |
Mar/2024 |
M |
M |
M |
|
Exports and Imports of Goods |
Jan/2024 |
Mar/2024 |
M |
M |
M |
|
GDP/GNP8 |
Q4/2023 |
Mar/2024 |
Q |
Q |
Q |
|
Gross External Debt |
Q4/2023 |
Mar/2024 |
Q |
Q |
Q |
|
International Investment Position6 |
Q4/2023 |
Mar/2024 |
Q |
Q |
Q |