Pr
ishtina, November 11, 2024
Honorable Speaker of the Assembly, Glauk Konjufca
Honorable members of the Assembly of the Republic,
Dear citizens of Kosovo,
With honor and pleasure, today I stand before you to become the first prime minister to present the fourth budget of the mandate, thus marking the first government to complete the mandate.
As you already know, the budget for the year 2025 is projected to be 3.6 billion euros, which is about 9% higher than the budget for 2024, or 60% higher than the budget for 2020.
To get to this point, we have overcome many challenges, both global and internal. At the same time, unlike others before us, we ensured that the budget was directed where the return was highest, to our citizens. By doing this, year after year, the budget was increasing without any changes in tax policy, because the investment in our citizens continued to yield sustainable growth.
The budget for the year 2025 is the fourth consecutive budget that we are presenting as the government in this term. We have always conducted the monitoring in the Government and the presentation of the budget in the Assembly in accordance with the rules set out in the Law on Public Finance Management. We presented the budget for the year 2022 in the Assembly on November 25, 2021. We presented the budget for the year 2023 on November 17, 2022. We are presenting the budget for the year 2025 again this November, just like we did with the budget for the year 2024 on November 16, 2023, and this time in the first half of the month. The larger the state budget each year, the earlier its presentation in the Assembly each time.
Other characteristics of the 2025 budget are as follows:
• The budget for salaries and allowances is 13.85% higher than in 2024 or 111.5 million euros;
• The budget for goods and services (including municipal services) is 3.2% higher than in 2024;
• The budget for subsidies and transfers is 8.75% higher than in 2024, with new measures such as pensions, child allowances, economic recovery, etc., playing a role.
• The capital investment budget is 8.3% higher than in 2024.
During these four years of governance, the Gross Domestic Product has increased to the extent that for the first time this year it will exceed the figure of 10 billion euros, while for the next year it is expected to surpass 11 billion euros. In the near future, we will have a Gross Domestic Product nearly seven times higher than in the year 2000, the first year after liberation, or almost three times higher than in 2008, the year of independence declaration, and almost 50% higher than in 2019, the pre-pandemic year.
When we look at it from a temporal distance, esteemed deputies, the global COVID-19 pandemic seems like a bad dream, which I hope we never forget because it was a time of great suffering, and many families lost their loved ones. As the government, we confronted this challenge from day one. As promised, we mobilized quickly, secured the vaccines, and managed to vaccinate the majority of the population in just a few months. As a result of rapid vaccination, the opening of our economy was made possible, but more importantly, Kosovo’s inclusion as a safe destination on other countries’ lists was enabled. This step paved the way for our diaspora to come like never before, after the impossibility of coming to you in 2020, when the borders were closed. The influx of migrants in record numbers has also provided our economy with the much-needed financial boost to achieve the record growth of 10.7% of the Gross Domestic Product that we have enjoyed as a state.
During this stage, as we know, did not last long, because just as we started the growth trajectory after the pandemic, the European continent was hit by an energy crisis, where even Kosovo could not escape without consequences.
As a responsible government, we took necessary actions and allocated a larger support package for the citizens, so that the exorbitant prices from international electricity import exchanges would not be passed on to the citizens and businesses. We have supported thousands of families in renovating and insulating their homes so that electricity consumption is reduced, and this support continues even now as we approach the final weeks and months of our mandate.
We have subsidized thousands of other families to buy efficient equipment, including heaters that consume less, so that the electricity bills weigh as little as possible on the family’s budget. We also supported those who saved electricity, where over 208 thousand families benefited from the coverage of a portion or the entire bill for 6 consecutive months, depending on how much they had saved. So we reward those who save. As a result of these measures, Kosovo continues to have the lowest electricity price in the region, according to Eurostat, and this is a very important characteristic for foreign investments and reinvestments made in Kosovo.
If the energy crisis in Europe was not enough, the Russian Federation opened a front by attacking Ukraine, which disrupted all global commodity markets, especially those of basic foods. The consequences were noticed across the entire continent, and this time Kosovo had no way to avoid the consequences just like the states that are much more economically powerful than us. Even for this challenge, we took the necessary measures by approving the Inflation Relief Package, through which we supported private and public sector workers, pensioners, and students, and this package as a percentage of the Gross Domestic Product is the largest in our region according to the World Bank.
As part of the package, we also approved the Law on Minimum Wage to enable the increase of the minimum wage in the private sector, as well as the Law on price ceilings to prevent abuse by irresponsible traders manipulating prices.
As you are aware, esteemed deputies, both laws were blocked by the opposition deputies by sending them to the Constitutional Court. Eventually, the Court that more often balances politics than administers justice, overturned one law for us – the one on ceiling prices, while approving the other – that on minimum wage. Damage nonetheless. For the first, because it never entered into force, and for the second, because its implementation was delayed by one year.
So, dear citizens, besides global problems and crises, we had to navigate through internal challenges, obstacles, and delays that were caused to us.
Although in most economies around the world, one of the main concerns has been the high level of consumer prices, we have managed to stabilize inflation through supportive measures for the citizens. The average until September 2024 has recorded a value of 1.9%, showing a downward trend of inflation and is expected to maintain a low growth trend for the remaining part of the year.
However, we managed together to overcome all these global challenges with much less damage than many other countries that are much more economically powerful than us. Despite the challenges, we managed to increase employment and, along with it, the country’s economy, thus helping to recover the purchasing power eroded by global challenges through domestic development and employment.
For four consecutive years, the number of employed individuals has consistently increased, a trend that has not occurred in any previous administration, in any government term before us. Therefore, we are also the government with the highest number of added jobs within the mandate, which is currently not yet completed, reaching 78 thousand more jobs than when we took office in the spring of 2021.
For four consecutive years, the average economic growth was 6%, and in no single year has it fallen below 4%, even when faced with global crises that occur, not even once in a century. In previous governments, even the smallest external crisis, such as the Greek crisis in 2012, slowed economic growth to 1.7%.
For four consecutive years, we have increased budget revenues, and now with the budget for 2025, they are doubled compared to the budget revenues we found when we took office. The budget revenues, as in the previous year, have continued their very satisfactory performance and during the period January – September of the current year, 2024, they have recorded a significant increase of more than 7.1% or an increase of around 150 million euros compared to the same period of the previous year. The increase in employment, sustainable economic growth in the face of the most serious challenges, and revenue growth have enabled us to have this historic budget of 3.6 billion euros, which we are presenting to you today, esteemed deputies.
This budget is a budget for the family, as each family should and will benefit from it.
In a young family with three children, the mother receives 170 euros per month for six months or a total of 1,020 euros, while the children receive 90 euros per month, or 1,080 euros per year. No government before us has supported women and children. We have budgeted 145 million euros for this, which go directly into the household budgets of over 200 thousand families in Kosovo.
In a family with two students, the son studying graphic design has a tuition-free semester and has been accepted for a job through the “Superpuna” platform, where he will receive 350 euros per month or a total of 2,100 euros for six months, while the daughter studying computer science also has a tuition-free semester, but also receives a STEM scholarship (Science, Technology, Engineering, and Mathematics) worth 1,000 euros. Moreover, over 3,100 euros of direct support and tuition-free semester. No government before us has supported the youth as much. We have budgeted over 30 million euros for this, which alleviates the burden on families with students, children, or young people aged 18-29.
A family of a martyr, where the son has been accepted for a job as a police officer, will receive a 20% increased pension for the martyr parent and the police officer will receive an increased salary of 55 euros starting from January and then 110 euros starting from July onwards in 2025. We have budgeted an additional 110 million euros for the increase in salaries in the public sector.
In a family where the head of the household works for minimum wage and with two pensioners at home, one receiving the basic pension and the other the contributory pension, they will benefit from the increase of the minimum wage from 170 euros to 350 euros, and the pensioners will receive a 20% increase in their pension. We have budgeted an additional 100 million euros for increased pensions.
We have considered many combinations of different families: families with pensioners, families with children under 16, families of liberation war categories, families with employees in the public and private sectors, but their commonality is that each will benefit from our state’s common budget, like never before, and like with no other government.
We have also provided support to those families that had no employed members through the measure Qeveria për Familje, subsidizing 70% of the salary for six months. So far, around 4,000 families have benefited, the vast majority of which were previously dependent on limited social assistance.
In this budget, we also have the completion of the social reform, which has already started implementation through piloting, where for families receiving social assistance, the discriminatory criteria are planned to be removed, and sustainable employment is also encouraged, so that families can achieve long-term economic independence.
In other words, this budget considers the family as a whole and as a unit, and foresees an increase in purchasing power for each family, ensuring that the benefits of economic growth are distributed to everyone, not just to certain interest groups.
With this budget, esteemed members of the Assembly of the Republic also benefit businesses and the economy.
Firstly, they benefit from the increase in the family’s purchasing power, which I just mentioned, because the more money in the family’s account, the more economic activity for businesses, the greater the aggregate demand in the economy. This is confirmed when we observe the turnover of businesses over the years: from 12 billion euros as it was in the year before our government, it is expected to exceed the value of 22 billion euros by 2024. Our mandate indicates that the turnover of businesses has increased from 12 billion to 22 billion euros, almost doubling the turnover of businesses during the four years of this democratic and prosperous government.
Secondly, businesses benefit from the well-being and timely payment of invoices for the work done. At the end of 2020, the central level of governance, excluding municipalities here, owed businesses 143 million euros in unpaid invoices. Our businesses carry out work, the state doesn’t pay them. Such a high level of unpaid amounts implies that the business that has performed work for the state is not being paid, leading to liquidity problems and difficulties in paying obligations to suppliers or employee salaries. Therefore, we have prioritized addressing this situation, esteemed deputies, and by the end of 2023 the central level had only 33 million euros of unpaid bills, as some are always in circulation. Therefore, through a single action, we have increased the liquidity of businesses performing work for the government by 110 million euros. The debt was only 33 million euros out of 143 million.
Similar is the situation with compensations for private properties, where out of 103 million euros we have found, this figure has now dropped to just 17 million euros, which means that 86 million euros more are in the hands of citizens and businesses.
Thirdly, businesses, like with any other government, rely directly on the creation of new job positions, where the state subsidizes a part or the full salary for a specific period. Qeveria për Familje, the Superpuna platform, the Kosovo Generation Unlimited program together with UNICEF, or internships through the Employment Agency, are some of the implementing mechanisms of this support.
Fourthly, the increased budget also includes support through grants and subsidies distributed by line ministries, such as record support for the agriculture sector, or support for producers and start-ups from the Ministry of Industry, Entrepreneurship and Trade, or even the Ministry of Regional Development.
Fifth, this budget foresees support for businesses also for access to finance, increasing capital and windows in the Credit Guarantee Fund, or through supportive measures that subsidize investment loans.
This support comes as a continuation of the support provided during these years we left behind, where we subsidized the cost of electricity, so that our businesses and producers could continue to have the cheapest electricity in the region, or when we subsidized investment credits up to the level of 100 million euros, only for equipment or production lines.
The main contribution to economic growth during the upcoming medium-term period 2025-2027 is expected to come from consumption, public investments, and private investments. Consumption will increase from four types of growth:
• The increase in pensions, by 20% for all categories of old-age pensions and pensions determined by the Law for War Categories;
• The increase of children’s allowances, not just any increase but doubling and tripling;
• The increase of the coefficient for all employees in the public sector, along with the recent increase in the value of the coefficient and the increase in the number of coefficients; as well as
• The increase of the minimum wage that occurs after more than a decade of stagnation.
Honorable citizens,
we have prioritized education, healthcare, infrastructure, and defense in this budget. This budget has many other details and specifics, but I believe that in the following, you will have the opportunity to hear them directly from the line ministers.
With this budget, we prioritize sustainable economic development, continuing to create new job opportunities, and increasing prosperity for all. For the upcoming year, we expect economic growth to reach 5.6% of Gross Domestic Product in real terms, and our goal is to achieve this growth by including everyone, as it is our duty, as citizens deserve, without leaving anyone behind.
Therefore, I also invite you to vote for 2025 Budget.
Thank you for your contribution and attention!
Last modified: November 13, 2024