Republic of Kosovo: Fifth Review Under the Stand-By Arrangement

EXECUTIVE SUMMARYStand-By Arrangement. A 20-month SBA in an amount of SDR 90.968 million(154 percent of quota) was approved by the Executive Board on April 27, 2012, and thefirst purchase of SDR 4.251 million was made available following the Board meeting(Country Report 12/100). The second purchase of SDR 39.108 million was madeavailable upon Board approval of the first review on July 16, 2012 (Country Report12/180), and the third purchase of SDR 34.857 million was made available upon Boardcompletion of the second review on December 20, 2012 (Country Report 12/345). Thefourth and the fifth purchases, both of SDR 4.251 million, were made available uponBoard completion of the third review on April 24, 2013 (Country Report 13/113) andthe fourth review on July 15, 2013 (Country Report 13/224), respectively, but have notbeen drawn.Program status. All end-August 2013 and continuous performance criteria were met,as a renewed shortfall in customs collection was over-compensated by underexecutionof spending. A prior action on issuing a government decision that specifiesthe non-allocation of €88 million across expenditure categories was also met. Theapplicable structural benchmarks were met on substance (although in once case noton form). Missed by small margins were the indicative targets on the nonaccumulationof domestic payments arrears by the central and general governments.Under the program, the treasury has implemented several measures to improve therecording and monitoring of payment obligations, covered by structural conditionality.The authorities have expressed interest in a follow-up arrangement once this SBAexpires.Purchase. The authorities have indicated they will not purchase the amount that wouldbe made available upon completion of this review, in line with their intention to treatthe SBA as precautionary in 2013.Publication. The authorities have agreed to publication of the staff report.