Draft Budget 2025- Analysis of Budget Revenues and Expenditures

19/11/2024

Today, GAP Institute presented the report “Draft Budget 2025 - Analysis of Budget Revenues and Expenditures.” The draft budget for 2025, which has already been adopted in the first reading in the Assembly of Kosovo, is approximately in the amount of EUR 3.6 billion, representing an increase of EUR 293 million or 8.9% more than the 2024 budget. Through this report, the GAP Institute has provided a detailed analysis of the main budget allocations for 2025, addressing several key issues.

For 2025, about EUR 219 million of the budget increase is allocated to current expenditures, including increases in public sector salaries (EUR 111 million additional) and support for pensions and transfers (EUR 93.4 million additional).

For capital investments, an increase of EUR 71 million is planned. Around 90% of the projects are carried over from previous years, with 264 projects dating back to 2008–2019 receiving a budget of EUR 258 million in 2025. Meanwhile, there is a more equitable distribution of new capital investments by the central government towards municipalities, reducing political discrimination on partisan grounds. Municipalities governed by the PDK party will receive EUR 6.7 million, those of LDK EUR 5.6 million, VV EUR 5 million, and AAK EUR 3.4 million.

Key sectors such as health, education, justice, and defense will have a budget increase, although with gaps that need addressing. In health, the 2025 budget is planned at EUR 358.8 million, a 6% increase compared to 2024. However, this represents only 3.9% of GDP, placing Kosovo behind developed countries and second-lowest in the region for healthcare spendings.

For education, the budget is set to increase by EUR 11.1 million or 3% compared to 2024. The justice sector will receive an increase of EUR 12.2 million, bringing the total to over EUR 114 million for six central institutions, with the Ministry of Justice receiving the largest share. The Ministry of Defense will have a budget increase of approximately EUR 55 million, from EUR 153 million in 2024 to around EUR 208 million in 2025.

On the other hand, some municipalities, such as Pristina, Gjilan, and Zubin Potok, risk having the same budget as in 2024 due to the failure to approve the budget on time in the municipal assemblies. Additionally, the implementation of the new property tax law is postponed until 2026, thereby avoiding the implementation of progressive tax rates in 2025.Furthermore, the Draft Budget does not allocate reserve funds for covering unforeseen municipal expenses, which are often linked to collective agreements drafted at the central level. Lastly, another significant shortcoming of the Draft Budget is the lack of a gender perspective, a concern that remains unaddressed even in 2025.

To read the full report click here