Page 91 - SE Outlook Regions 2022

The strategy will ensure maintaining energy security, prices affordable
for consumers, increasing the use of clean energy, and ensuring
regional integration of the energy market.

The IMF said that reducing pollution and emissions requires cleaner
electricity generation. The installation of filters in Kosovo B, in
collaboration with the EU, remains a priority in this area.

3.5.5 Construction

Kosovo’s construction cost index (CCI) jumped by an annual 15.2% in
the third quarter of 2021, speeding up from a 12.1% increase in the
previous quarter, the Kosovo Agency of Statistics (KAS) data indicated.
This was the biggest increase of the CCI in Kosovo ever. In 2020, the
index rose only in the fourth quarter.

The increase of the index was mainly observed in the categories of
materials (20.5%), energy (17%), other costs (4.3%), machinery (3.4%)
and salary (2.3%). The increase in prices was mainly neutralised by the
decrease in transport prices (-2.8%).

The construction sector jumped by 27.3% y/y in the second quarter of
2021, which was among the biggest increases of any sector of the
economy.

The budget for 2022 allocates funds for the construction of a road
leading from the Kosovan town of Prizren to Tetovo in North
Macedonia.

Kosovo's Prime Minister Albin Kurti expects the construction of the
Pristina-Podujevo (near the border with Serbia) motorway to be
completed in 2022. The expansion of the Pristina-Podujevo motorway
started in 2016 and was supposed to be completed within three years.
However, even though five years have passed, the construction of the
road is not finished due to difficulties regarding expropriations.

3.5.6 Major Sectors

Construction comprises almost 60% of private investment activity in
Kosovo. The sectoral structure of foreign direct investment (FDI) in
Kosovo is dominated by real estate. In the first nine months of 2021,
FDI totalled €389mn, of which €265mn went to real estate activities.

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