Living on 1.85 euros a day, families in Kosovo take out loans to buy food

2023-11-07 15:19:00, Ekonomi CNA

Living on 1.85 euros a day, families in Kosovo take out loans to buy food

Illustrative photo

Many families in Kosovo are being forced to go into debt to banks even for food items. In 2023, an additional 10% of households live below the threshold of 1.85 euros per day.

A survey conducted by UNDP about the impact of the price crisis in Kosovo reveals frightening data on the consequences that the uncontrolled increase in prices in the last two years had on many families.

According to the survey "Examining the dynamics of household poverty in the face of inflation", 10% of households in Kosovo were significantly poorer between 2023 and 2021.

"Compared to 2021, in 2023, an additional 10% of surveyed households lived below the threshold of 1.85 euros per day, when adjusted for price increases," the survey states.

Using income data and the poverty line of 1.85 euros per person per day, the poverty rate in 2023 is estimated to be 16%, compared to 17.6% in 2022 and 14.5% in 2021.

As a result, many families in Kosovo were forced to go into debt to banks even for food items.

"Inflation has led to increased debt among households, relying on loans and credit cards to meet financial needs. In order to fight the consequences of inflation in the last year, 16.1% of the respondents used credit cards and 16.3% of the respondents stated that they should use credit cards or other forms of debt to cover the increased household expenses; Financial difficulties are evident, with 29% of respondents cutting back on spending and delaying bill payments, the survey said.

According to the survey, inflation has affected mental and social well-being, causing interruptions in routine activities and increased stress, leading to lower quality of life; 46% stated that their stress and anxiety increase as a result of price increases (a higher percentage among Kosovo's Roma, Ashkali and Egyptian communities); 36% reported impact on personal relationships or social life; and 23% are worried about their mental well-being because of inflation.

Kosovo does not have updated data on poverty in the country.

The last ones, compiled by the Kosovo Statistics Agency (ASK) and the World Bank, are from 2017.

According to them, 18% of the population of Kosovo lives in poverty, namely with about 2 euros per day, while 5.1 percent lives in extreme poverty or with less than 1.5 euros per day.

A new KAS survey was published last year, according to which, an unexpected expense of 100 euros per month would be affordable for 43% of families in Kosovo. Meanwhile, the expenses for a week's vacation away from home are unaffordable for 42.7% of families.

Kosovo ended 2022 with an inflation rate of around 12%, from 3.4% in 2021.

In the program of the Government of Kosovo for the years 2021-2025, it is stated, among other things, that citizen well-being will be targeted through the support of vulnerable groups and the restructuring of social and pension schemes.

The steps taken so far by the current Government include: increasing old-age pensions, distributing child allowances and paying maternity leave for unemployed mothers.

If you look at KAS data for Gross Domestic Product (GDP), they show an increase in the standard.

According to them, GDP per capita in 2014 was 2,950 euros, while in 2022 it was 5,037 euros.

Likewise, the number of families with social assistance has decreased. According to KAS, 20,810 families received social assistance from the Kosovo state budget in August 2023, which means 3,817 families less than in the same period of 2022.

Social assistance - from 60 to 180 euros per month, depending on the number of members - is given to families with difficult financial conditions and who have no employed member.

With over 1.7 million inhabitants, Kosovo has the lowest minimum wage in Europe, ranging from 130 to 170 euros per month. The average salary in the country is 520 euros./ Monitor magazine