financial stability report - Banka Qendrore e RepublikÃ«s sÃ« KosovÃ«s

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Number 3 Financial Stability Report Moreover, new registered enterprises are mainly micro-enterprises 3 (99.01 percent of total new enterprises), while the remainder consists of small (0.84 percent), medium (0.11 percent), and large enterprises (0.04 percent). 4.1.2. Prices Inflationary pressures which reached their peak in March 2011 began to soften in the coming months, reaching the lowest level in March 2012. Consumer Price Index (CPI) for the first half of 2012 recorded an annual average growth rate of 1.5 percent, which is a relatively low compared with the Figura 15. Annual rate of Consumer, Import, and same period of the previous year, Producter Price when inflation recorded an annual 15.0 average growth rate of 9.6 percent 12.0 (Figure 15). The softening of 9.0 inflationary pressures in 2012 is 6.0 mainly addressed to weakening 3.0 demand and the overall price 0.0 developments in global level. -3.0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Prices of products such as bread 2011 2012 and cereals, vegetables, and oils and fats had the main influence in IPI PPI CPI softening the inflation. Meanwhile, Source: ASK (2012); CBK calculations oil prices continued to have a positive impact on the growth of the general price level in the country. Price fluctuations in Kosovo are largely as a result of the price changes in external markets, which are reflected through the Import Price Index (IPI). In the first half of 2012, the annual average growth rate of IPI was 6.0 percent. High sensitivity of the price level in Kosovo by price movements in global markets is also shown in Figure 15, where it can be seen that the trend of the CPI and Producer Price Index (PPI) have followed a very similar trend to IPI. Similar trend of import prices and producer prices shows a fairly heavy reliance of domestic production on the import of raw materials from abroad. Despite of this, in the first half of 2012, the CPI has been significantly lower than the IPI (a difference of 4.8pp). Figure 16. Real Effective Exchange Rate 115 110 105 100 95 90 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Source: CBK (2012) 2010 2011 2012 REER Total REER CEFTA REER EU This difference is attributed to the PPI, which in the first half of 2012 recorded an average deflation rate of 0.1 percent. The decline of producer prices is manifested mainly in the extraction of metallic minerals, metal production, furniture production, etc. 3 Classification of enterprises by size was based on the number of workers, such as: micro (1-9 employees), small (10-49 employees), medium (50-249 employees) and large enterprises (250 employees). 30 |
Financial Stability Report Number 3 As a result of the softening of inflation in the first half of 2012, the real effective exchange rate (REER) of Kosovo depreciated against the currencies of trading partners, which is a positive development for the Kosovo’s economy since it supports the competitiveness of the local manufacturers in the foreign markets (Figure 16). REER depreciated by an annual average rate of around 0.9 percent. The main factor which affects the level of REER in Kosovo against trading partners is the level of inflation, which in the first half was lower compared with the CEFTA and EU countries for 1.3 and 1.2pp, respectively. | 31
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financial stability report - Banka Qendrore e RepublikÃ«s sÃ« KosovÃ«s

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