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      

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