Bosnia’s foreign trade deficit narrowed 12.5% y/y to BAM 3.6bn (EUR 1.8bn) in January-July 2013 on the back of rising exports and falling imports, the statistics office said. The reading accounted for 13% of the full-year GDP, improving from 15.7% of GDP a year earlier. The export-import coverage ratio strengthened to 58% in January-July from 52% a year earlier.

Exports rose 8.5% y/y to BAM 5.0bn in the first seven months of the year whereas imports contracted 1.5% y/y to BAM 8.6bn.

The imports retreat was mainly driven by falling utilities and capital goods purchases. On the other hand imports of non-durable consumer goods (food, beverages, tobacco clothing and footwear, medicines and others) continued increasing possibly implying a mild recovery of consumption.

Higher manufacturing and utilities sales remained the key drivers of Bosnia’s export growth in January-July.

Manufacturing exports rose 4.8% y/y to BAM 4.3bn (86% share in total) lifted by increasing sales of furniture, food, leather, wood, machinery and equipment and fabricated metal products which offset falling basic metal exports.

January-July sales of electricity, gas, steam and air conditioning supply jumped 192% y/y to BAM 329mn, reflecting favorable hydrological conditions in the winter season.

Export growth is expected to offset falling domestic demand and will support a mild 0.5% GDP expansion oin 2013, according to the IMF. The economy contracted 0.7% in 2012.