Fiscal Policies as Boost of the Economic Development of Kosovo

Abstract

Knowing that in a world where everything seems to be changing, doing all you can to build a proper Fiscal policy as boost of the economic development, presents a new and very often dismaying challenges for most of the countries in the region and particularly for the Kosovo as a transition country. This research study will include first of all the role of public sector in the economy of Kosovo, through the analysis of the economic and fiscal policies and drafting the strategic development plans for stimulating measures for creating new workplaces and employment growth rate, undertaken by the government of Kosovo in comparison with some other regional countries. According to many publications and analyses, the economy of Kosovo will not be disqualified by external developments and it is necessary for the government to take adequate measures to create gently calming effect of the situation. It is well known that Fiscal Policy affects the materialization of the economic policy aiming first of all, price stability, level of employment, solvent balance of payments, and economic growth rate, through collecting the public income and public expenditure realization, which creates effects on macroeconomic aggregate performance and its behavior of economic entities in Kosovo. Fiscal policy in interaction with other government policies has a special importance in the national economy which would help in the formulation of financial strategy and strategic development objectives, as well as the analysis mainly of the private sector which continually has to play the leading role in the development of the national economy. So, the special focus of this paper will be on fiscal policy, which has an impact on budget revenues due to the possible decrease of imports and trying to increase exports – as a result of financial supporting of Kosovo manufacturing private business for creating the lower overall demand for imported products and services, having in mind that the current main source of budget revenues of Kosovo are the border customs and the tax revenues. This may have a reflection in public spending with periodically negative impacts on economic activities of the Kosovo, with one good appearance on long term development orientation. From other side the reducing economic activities also have a strong effect on level of savings in Kosovo which could be proved declining the level of deposits. Finally in concluding part of this research paper will be given suggestions for improvement and overcoming problems is facing the economy of Kosovo.

DOI: 10.5901/ajis.2015.v4n2p479