Kosovo will probably receive a credit rating by Standard & Poor’s as it considers tapping international investors for funds to rebuild its infrastructure, Finance Minister Bedri Hamza said.
The Finance Ministry plans to raise 74 million euros ($98 million) with its first sales ever of Treasury bills this year to finance expenditure and investments, and another 110 million euros through a new loan package from the International Monetary Fund. S&P analysts will visit the Balkan nation in June to assess its creditworthiness, Hamza said yesterday in an interview at his office in the capital, Pristina.
“We will be very careful when it comes to foreign debt as we are also able to mobilize our domestic resources,” Hamza said, adding that the government doesn’t plan to seek “large amounts in the range of 500 million euros” after it receives a credit rating. “We are also developing ideas for public-private partnerships for large projects.”
Kosovo, which saw its infrastructure partially destroyed during the North Atlantic Treaty Organization bombing in 1999 when Serb troops were chased out of the province, wants to complete its highway network and other projects that are meant to spur economic growth and raise living standards to the level of its Balkan peers.
Western neighbor Albania is rated B+ at S&P, the fourth highest level in the non-investment grade, while Serbia to the north has a BB score, the second highest non-investment level.
Kosovo’s economy, which depends on investments, exports and remittances from Kosovars living elsewhere in Europe, will probably expand 5 percent this year, Hamza said. That compares with the 3.8 percent growth outlook by the IMF.
“There are no indications that we can’t reach that level,” Hamza said.
After the completion of the highway linking Pristina with the Albanian capital Tirana, expected by the end of the year, and other infrastructure projects, economic growth will be boosted to more than 6 percent, Hamza said.
As some European nations struggle with a high debt burden, Kosovo indicators are much below the thresholds set in the euro region’s growth and stability pact. The budget deficit, which stood at a 1.8 percent of gross domestic product last year, according to Hamza, may rise to a 2 percent level. Public debt is at 5.5 percent of total output, he said.
Kosovo won recognition for its independence four years ago from 22 out of 27 members of the European Union, which it wants to join. Serbia, which refuses to acknowledge Kosovo’s sovereignty, won candidate status to join the world’s largest trading bloc this month.
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