IMF keeps Bosnia’s 2014 GDP growth forecast at 2%, lowers estimate for 2015

By bne IntelliNews April 9, 2014

The IMF expects Bosnia's economy to grow by 2% in 2014, the fund said in the April edition of its World Economic Outlook report, keeping its estimates unchanged from a previous forecast made in January. However, the IMF cut its 2015 growth outlook to 3.2% from 3.5% expected earlier. Growth is seen strengthening to 4.0% in 2019, the Fund also said.

The IMF's 2014 growth forecast is less optimistic than the central bank’s projection for a 2.4% GDP expansion this year. It overshoots the EBRD’s projection of 1.8% GDP growth in 2014.

According to the IMF, Bosnia’s GDP will grow below the average for Emerging and Developing Europe in 2014 (2.4%). Next year, however, the country’s GDP will expand at a faster pace than the region’s average of 2.9%.

In 2014, the average CPI inflation in Bosnia is expected to quicken to 1.1% following a 0.1% deflation in 2013. It will accelerate slightly to 1.5% in 2015. In the mid-term, the fund expects the average inflation to speed up to 2.1% in 2019 on the back of recovering economy.

Bosnia's current account gap is seen widening to 7.5% of GDP in 2014 from 5.6% a year ago. It is expected to narrow to 7.0% of GDP in 2015 and shrink further to 4.6% in 2019.

In regional comparison, the IMF projected the Albanian economy to expand by 2.1% in 2014, Serbia by 1.0% y/y, Montenegro- by 2.8% y/y while Croatia will shrink by 0.6%.

Bosnia's main macroeconomic indicators 2013 2014 2015 2019
Real GDP,% 1.2 2.0 3.2 4.0
Emerging and Developing Europe 2.8 2.4 2.9 3.4
Current account balance,% of GDP -5.6 -7.5 -7.0 -4.6
Emerging and Developing Europe -3.9 -3.6 -3.8 -4.2
CPI, average, % -0.1 1.1 1.5 2.1
CPI, end-year,% -0.1 1.1 1.5  
Emerging and Developing Europe, average,% 4.1 4.0 4.1 4.0
Source: WEO April 2014      

Related Articles

Freedom House keeps “partly free” status for Macedonia despite new government’s efforts

Macedonia was rated only “partly free” in the latest report from international watchdog Freedom House, the same almost all of the six Western Balkan countries, despite efforts by the ... more

World Bank loan aims to revitalise Republika Srpska's little-used railways

The World Bank said it is lending $51.3mn to Bosnia & Herzegovina’s smaller entity, Republika Srpska, ... more

Bosnia’s constitutional court allows policemen to keep their beards

The constitutional court of Bosnia & Herzegovina ruled on November 30 that a regulation obliging border policemen to shave their beards violates their ... more