Annual Report 2010 03 August 2011 - Banka Qendrore e ...

Annual Report 2010
CBK
comparison with the previous year, the share of public investments to total investments in
Kosovo recorded a slight decline.
The increase of private and public sector consumption led to a higher growth rate of the
overall consumption in 2010, compared to year 2009. The real growth rate of total
consumption in 2010 was 3.3 percent (0.9 percent in 2009). Also overall investments in
Kosovo marked positive developments during 2010, recording a real growth rate of 7.8
percent (9.8 percent in 2009). Private sector investments recorded a real growth of 5.9
percent in 2010, compared to the 2.2 percent growth rate in the previous year. The increase
of private sector investments has resulted from the increase of both domestic and foreign
investments. Public sector investments also contributed to the increase of total investments
in the country, although growing with a slower pace compared to year 2009. The annual
real growth rate of public investments in 2010 was 11.7 percent, compared to the growth
rate of 29.0 percent in 2009 (IMF, 2011).
As a result of the relatively large volume of Kosovo’s imports compared to the volume of
exports, the negative trade balance continues to have a negative impact in the Kosovo’s
GDP. The deepening of the trade deficit by 4.5 percent during 2010, led to a more
significant negative impact of the trade deficit on the GDP in 2010. Despite the low base,
Kosovo’s exports in 2010 recorded a significant growth rate, reaching the highest level in
the postwar period. Kosovo’s imports from abroad also marked an increase during 2010,
which may reflect an increase of domestic demand, taking into consideration that imports
in 2009 had marked a decline.
3.1.2. Prices
In year 2009, Kosovo was
characterized with deflation.
Whereas, following the inflationary
pressures in the global level during
2010, also Kosovo’s economy
recorded an increase of the
inflation rate, which took place
especially during the second half of
the year (Figure 3). The Consumer
Price Index (CPI) during 2010
recorded an average annual
growth rate of 3.5 percent,
Figure 3. Consumer Price Index, annual change
20%
15%
10%
5%
0%
-5%
-10%
whereas, the annual growth rate in the end of the year (December 2010 compared to
November 2010) reached at 6.6 percent.
The increase of prices in Kosovo mainly reflects the increase in the food prices during 2010,
which in the same time represent the largest item in the consumer’s basket in Kosovo. The
average annual increase of food prices during 2010 was 4.7 percent. The increase of housing
prices and the prices of public services, such as electricity, water, heating, etc., have also
contributed to the increase of overall price level in Kosovo.
Price fluctuations in Kosovo are to a considerable extent driven by changes in the prices of
imported goods, due to the high dependency of the country’s economy on the import of goods
from abroad. In 2010, the average annual growth rate of the Imports Price Index (IPI) was
6.0 percent (Figure 4).
14.0%
0.5%
-4.0%
0.1%
2.2%
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
No
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
No
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
No
Dec
Source: SOK (2011)
2008 2009 2010
6.6%
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