Index of economic freedom 2022, Kosovo loses 28 places

Index of economic freedom 2022, Kosovo loses 28 places

English


Gazeta Express

02/16/2022 22:56

The Heritage Foundation has published Index of Economic Freedom 2022showing that Kosovo has fallen 28 places compared to 2021. According to the index, Kosovo is ranked 86 in the world, while in Europe it is ranked 40and position on 45 countries listed, reports Gazeta Express.

Kosovo’s economic freedom score is 60.1, making its economy the 86th freest in the 2022 index. Kosovo is ranked 40th among 45 countries in the Europe region, and its overall score is lower than the regional average but higher than the global average, according to the report.

“Over the past five years, Kosovo’s economic growth accelerated from 2017 to 2019 before turning negative in 2020. There was a healthy recovery in growth in 2021. A five-year trend of declining economic freedom continued. With a sharp drop in scores for the rule of law, Kosovo has seen an overall loss of economic freedom of 7.8 points since 2017 and has fallen to the bottom of the “Moderately free” category. Monetary freedom and trade freedom are relative strengths, but financial freedom is weak,” according to the report.

IMPACT OF COVID-19: As of December 1, 2021, 2,984 deaths have been attributed to the pandemic in Kosovo, and the government’s response to the crisis ranks 91st among the countries included in this index in terms of stringency. The economy contracted by 6.0% in 2020.

The report states that property rights in Kosovo are respected, but weaknesses in the legal system and difficulties in establishing title to property, partly due to competing claims arising from historical of the conflict with Serbia, make application difficult. The weak judiciary lacks independence and technical capacity. Corruption is widespread and a serious concern, and the institutional framework to combat it is weak.

The highest personal and corporate income tax rates are 10%. Other taxes include value added tax and property tax. The overall tax burden is equivalent to 23.4% of total domestic income. Public spending has amounted to 30.7% of total output (GDP) over the past three years, and budget deficits have averaged 4.4% of GDP. Public debt is equivalent to 24.4% of GDP.

Political interference in free business and a general lack of contract enforcement can make running a business in Kosovo a risky venture. A skills and wage gap is partly responsible for Kosovo’s persistently high unemployment rate. In addition to maintaining large agricultural and energy subsidies, the government continues to support loss-making public enterprises.

Kosovo has two preferential trade agreements in force. The trade-weighted average duty rate is 3.2%. Efforts to dismantle persistent non-tariff barriers continue. Foreign and domestic investors are generally treated equally under the law. Public enterprises distort the economy. The financial system is dominated by the banking sector and continues to evolve. In 2020, several temporary measures have been taken to mitigate the immediate financial impact of the COVID-19 pandemic.

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