The monetary sector was the primary pillar of help for companies and people


Distinguished media representatives,

First, let me thanks in your presence at this convention on the finish of the 12 months and for the continual and efficient cooperation that we’ve cultivated over time in an effort to correctly inform the general public in regards to the exercise of the CBK, in addition to financial and monetary developments within the nation.

Communication with the media is an especially vital a part of CBK’s exercise. By way of your correct reporting, we’ve managed to maintain the general public nicely knowledgeable about developments within the monetary system and the economic system of the nation, influencing the behaviour of the general public in relation to the situations created within the economic system to be rational. Due to this fact, I want to take this chance to precise my appreciation for the sacrifice and professionalism proven throughout this 12 months as nicely.


Regardless of the difficulties we confronted, I’m completely satisfied that the Central Financial institution of the Republic of Kosovo managed to realize its targets this 12 months as nicely, offering a secure monetary system, which not solely managed to resist the unfavourable financial developments within the nation, but additionally to be one of many major pillars of help to companies and people, and thus to the nation’s economic system.


Now, let me current to you a abstract of the developments that characterised the nation’s economic system and monetary system throughout this 12 months, primarily based on the newest knowledge out there for related sectors.


Kosovo’s economic system began 2021 with a relatively unsure perspective, on condition that we have been abandoning a really tough 12 months, by which restrictive measures in opposition to the unfold of the pandemic had precipitated an actual financial decline of 5.3 %, which was the most important blow to the economic system within the final 20 years.

Nevertheless, easing the measures of motion of residents inside and out of doors the nation, which resulted in a lot of diaspora visiting Kosovo in the course of the summer time months, along with the supportive insurance policies of the Authorities of Kosovo and the Central Financial institution of the Republic of Kosovo for the economic system, made 2021 to be characterised by very optimistic developments for the nation’s economic system, which, in keeping with the newest estimates of the CBK, is anticipated to mark an actual development fee of about 9.9 %.

Based on knowledge recorded till October this 12 months, the expenditures of non-residents in Kosovo, most of that are from the Diaspora, have been within the quantity of 1.33 billion Euros an improve of 151.3 % in comparison with the identical interval final 12 months.

Additionally, 2021 marked a sooner development fee of remittances despatched from the Diaspora in Kosovo. The worth of remittances acquired by the top of October 2021 is 956 million Euros, which represents an annual improve of 20.0 %

The rise in home demand in Kosovo, throughout this 12 months, was mirrored in the next worth of imports of products, which, by November 2021, marked the worth of 4.2 billion Euros or an annual improve of 42.5 %. Alternatively, the export of products amounted to 684.7 million Euros, marking an annual improve of 60 %. Because of these occasions, the commerce deficit on the products account by November 2021 might be value 3.5 billion Euros, which is an annual improve of 39.6 %

Alternatively, the export of providers till September 2021, amounted to 1.59 billion Euros, marking an annual improve of 117 %, which has occurred primarily on account of elevated visits of our compatriots and vacationers to the nation. The import of providers was additionally characterised by a rise, which, till September 2021, registered a worth of 642 million Euros.

Due to this fact, the entire imports of products and providers, till November this 12 months, are within the quantity of about 5 billion Euros, whereas exports of products and providers are within the quantity of about 2.3 billion Euros.

As for overseas direct funding, their worth by September 2021, amounted to 389 million Euros, in comparison with the worth of 254 million Euros recorded by September 2020. Throughout this era, excessive development was recorded in FDI in actual property investments, which amounted to 265 million Euros, in comparison with the quantity of 129 million Euros recorded by the top of September 2020, or expressed in share, we’ve a rise of 106 %. Alternatively, investments within the monetary providers sector amounted to about 87 million Euros, in comparison with the quantity of about 67 million Euros recorded throughout the identical interval final 12 months.

As for different macroeconomic indicators, it’s value emphasizing that the common inflation till November 2021 marked a fee of 3.1 % in comparison with the annual common of 0.2 % for 2020. Whereas, the inflation fee for November 2021 alone was 6.9 %, which exhibits that we face a development of development within the general worth degree. The rise within the inflation fee in Kosovo primarily displays the rise in costs in worldwide markets, which, in Kosovo, are transmitted by the rise in costs of imported items.


Concerning the monetary system, it is extremely vital to notice that Kosovo has managed to construct a sound monetary system, which not solely proved able to withstanding a really unfavourable financial surroundings throughout 2020, but additionally performs an important position in supporting the economic system to deal with the disaster with the smallest attainable penalties.


Over the previous 12 months, seeing that the nation’s economic system was coming into a disaster, and that companies and residents began dealing with monetary difficulties, the CBK, primarily based on worldwide finest practices and in cooperation with lending establishments in Kosovo, took quite a few measures to assist the economic system cope extra simply with the challenges of this disaster.

Initially, we took the measure to use the moratorium on mortgage repayments with none punitive measures for all debtors who’ve been adversely affected by the pandemic. This moratorium has quickly relieved the borrower of the mortgage compensation burden, thus enhancing their liquidity place to finance different wants.

Following the top of the moratorium interval, the CBK has revealed pointers for mortgage restructuring in an effort to set up the factors on which the mortgage restructuring course of needs to be primarily based for debtors who’ve encountered monetary difficulties on account of the pandemic. Mortgage restructuring pointers have made it attainable to ease the credit score burden on debtors with out implicating any deterioration of their classification within the Credit score Registry of Kosovo. Guideline for credit score restructuring has been prolonged till the top of March 2021, in an effort to be applied extra broadly for companies in monetary difficulties.

The measures taken by the CBK have been assessed as very enough each by the native public and by worldwide monetary establishments, such because the Worldwide Financial Fund in Article IV Report on Kosovo and the World Financial institution.


Regardless of the elevated dangers because of the financial difficulties that companies have inherited from the pandemic interval, the banking sector continued to extend lending and preserve the diploma of stability. Till November 2021, the worth of new loans issued by the banking sector was about 1.6 billion Euros, representing an annual improve of 21 %, whereas the entire worth of lively loans within the banking sector till November 2021 was 3.7 billion Euros, representing an annual improve of 14.7 %.

Complete property of the banking sector have continued the expansion development throughout this 12 months, amounting to 5.79 billion Euros in November 2021, representing an annual improve of 13 %.

The banking sector continues to get pleasure from excessive public belief, which can be expressed by the continual development of deposits. In November 2021, the entire worth of deposits was about 4.67 billion Euros, representing an annual improve of 12.8 %. The expansion fee of complete deposits is especially dictated by family deposits, a class that dominates the construction of complete deposits within the banking sector with a share of 69.6 % in complete deposits, and which, by October 2021, marked an annual improve of 18 %.

The typical rate of interest on loans in November 2021 was 5.6 %, which is decrease than the speed of 6.1 % recorded in November 2020. The monetary well being indicators for the banking sector proceed to indicate a excessive degree of sustainability in all points. It’s value emphasizing the great high quality of the mortgage portfolio with a non-performing mortgage fee of solely 2.3 % in November 2021. Protection of non-performing loans with mortgage loss provisions stays at a excessive degree of 147.8 %, which signifies applicable ranges of provisions within the banking sector

The banking sector continues to have a excessive capital adequacy ratio of 17.5 % on the finish of October, which continues to be considerably above the minimal regulatory degree of 12.0 %.

The liquidity place of the banking sector stays excessive. The ratio of liquid property to short-term liabilities in July reached 38.4 %, which is nicely above the required regulatory minimal of 25.0 %.


We even have optimistic developments within the insurance coverage sector. The property of insurance coverage sector, representing about 3.0 % of the entire property of the monetary system, in September 2021, reached the worth of 235.7 million Euros, representing an annual improve of 10.0 %.

You will need to emphasize that the capital of the insurance coverage sector has been elevated this 12 months as nicely, on account of the CBK’s request for a capital improve. The worth of insurers’ capital in September 2021 amounted to 61.1 million Euros with an annual improve of 5.9 %.

Whereas, this sector continued to have a optimistic monetary efficiency throughout this era, recording a web revenue of 5.9 million Euros till September 2021. Gross written premiums by insurance coverage corporations till September 2021 amounted to 86.9 million Euros, or an annual improve of 20.2 %, whereas gross claims paid amounted to 45.6 million Euros, or an annual improve of 30.0 %.

Because of the aggravated monetary state of affairs and non-fulfilment of authorized necessities for capital, in an effort to shield policyholders and to stop rising unfavourable impression on the insurance coverage market and monetary system normally, throughout this 12 months, the CBK, primarily based on the duties and obligations arising from the Regulation on CBK and the Regulation on Insurance coverage, has determined to revoke the insurance coverage license of the insurer “Kosova e Re”.

This determination was a continuation of a collection of measures taken by the CBK to extend the sustainability of the insurance coverage sector, in an effort to guarantee a secure sector and in accordance with the authorized necessities of the CBK.


Throughout this 12 months, the pension sector was additionally characterised by development, in comparison with the earlier 12 months. The overall worth of the property of the pension sector, in October 2021, reached 2.29 billion Euros, in comparison with 2.07 billion in October 2020, which corresponds to an annual improve of 10.7 %. The pension sector marked a optimistic monetary efficiency, marking a return on funding of about 133 million Euros. New pension contributions throughout this era amounted to about 157 million Euros.


Concerning the sector of microfinance establishments and non-banking monetary establishments, by November 2021, the property of this sector amounted to 343.1 million Euros, which is an annual development of 8.6 %.

The overall lively loans of this sector in November 2021 recorded a worth of 238 million Euros, or an annual improve of 16.1 %.

The typical rate of interest on new loans issued by microfinance establishments in November 2021 was 18.8 %, which was 19.7 % in the identical interval final 12 months. On this sector, too, the great high quality of the mortgage portfolio is assessed with a non-performing mortgage fee of 2.9 %.


When it comes to inner developments, the CBK, throughout 2021, has continued to advance and develop its skilled capacities in all areas of its motion.

Regardless of the created state of affairs and never very beneficial situations within the worldwide markets, the Central Financial institution of the Republic of Kosovo has managed to take care of its monetary stability and good efficiency of the establishment, producing a optimistic monetary end result.

The CBK stays dedicated to persevering with its exercise within the service of stability and improvement of the nation’s economic system, creating the situations for the event of a sustainable monetary infrastructure, in step with modern developments on this area, together with the event of recent segments of the monetary system such because the capital market, which requires a broad inter-institutional interplay.


Earlier than I obtain your questions, let me inform you that the CBK has continued to announce the already conventional competitors for the “Younger Economist” award. On this event, I want to thank and congratulate all of the candidates for his or her works that they’ve submitted inside this competitors.

This exercise goals to advertise analysis actions within the area of economics amongst younger individuals.

Primarily based on the evaluation of the skilled fee for the submitted works, I’m happy to announce the winner of this award, Erzana Uka, with the subject “The impression of digitalization on the banking system”.

In the long run, hoping and believing that subsequent 12 months might be a extra optimistic 12 months in all points, I want good well being, pleasure and success to all of you and your households.


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