Draft Budget 2023 - Analysis of budget revenues and expenditures


On 28 October 2022, the Government approved the Draft Law on the Budget of Kosovo for 2023, and the Assembly adopted it in the first reading on 17 November 2022.

GAP Institute analyzed the budget allocations for 2023, and compared them with 2022.

Budget expenditures in 2023 are expected to be around 3.2 billion Euro, marking an
increase of 464 million Euro compared to 2022. 2023 Draft Budget envisages a faster growth of current expenditures than capital ones, compared to 2022. Among the main categories of current expenses, the biggest budget increase is in subsidies and transfers, with around 205 million Euro, or 23%.

The 2023 budget for wages and salaries has increased by 75 million Euro (11%) compared to 2022. In this category, around 65.1 million Euro are budgeted as contingency for salaries, intended to cover the additional cost of the Law on Salaries.

The 2023 Draft Budget has created room for 1,435 additional jobs, of which 910
for the central level and 525 for the municipal one. At the central level, 300 additional positions are foreseen  for the Kosovo Police, 108 new positions for the Assembly of Kosovo, of which 100 for political support staff For municipalities, this means an increase in the number of allowed positions, with Prishtina having 86 additional positions, Municipality of Prizren 44, etc.

Of the total 810.7 million Euro expected in capital investments, 611.4 million Euro (75%) are planned for ongoing projects, and 199.3 million Euro (25%) are planned for new capital projects. Of 199.3 million Euro for new projects, around 26% (51.2 million Euro) are allocated to the central level and 74% (148.1 million Euro) to the local level. Of the 51.2 million Euro in new capital investments at the central level this year, there are around 22 million Euro intended for specific projects in 20 municipalities. Around 52% of this amount (12 million Euro) will be allocated to the three municipalities led by VV, municipalities that cover 9% of Kosovos territory and 8% of the population.

The 2023 Draft Budget has also budgeted 75 million Euro as a contingency for dealing with the potential energy crisis. Despite an increase in the 2023 budget for healthcare and education, funding for these sectors remains below the EU average as
percentage of Gross Domestic Product (GDP).

The 2023 Draft Budget, requires that all unspent municipal revenues collected prior to 2022, will be transferred and used by the Government for various needs. This initiative could significantly affect the revenues of municipalities, specifically the projects which may have already started, for which financing may have been based on these revenues.

The ongoing weaknesses with the implementation of the budget over the years have also been seen in 2022, including in the planning for 2023, namely: low pace of execution of
capital investments, lack of a clear link between the budget and medium and long-term planning, high prevalence of budget lines without a specific intended use, lack of gender mainstreaming, etc.

The full report can be found here.