Bosnia and Herzegovina Country Report - September, 2016

October 12, 2016

This report covers the main macroeconomic releases from September 1 until September 30, 2016 as well as the financial and political events that took place in Bosnia during this period.
The EU General Affairs Council decided on September 20 to recommend to the European Council to launch the procedure for granting Bosnia & Herzegovina candidate status, rewarding the country for its efforts to move towards its EU future despite internal tensions and disagreements.
The International Monetary Fund (IMF) approved a three-year extended arrangement with Bosnia & Herzegovina for an amount equivalent to SDR443.042mn (€553.3mn). The IMF will immediately disburse around €79.2mn to Bosnia, and the remainder will be available in 11 installments subject to quarterly reviews.
The World Bank has improved its projection for Bosnia & Hercegovina’s economic growth in 2016 to 2.8% from 3% last year, which should result in the creation of new jobs.
99.8% of voters in Bosnia & Herzegovina’s Republika Srpska supported the celebration of Republic Day, despite the holiday being declared unconstitutional by the state-level constitutional court.
Bosnia & Herzegovina’s state-level prosecution has launched an investigation into the September 25 referendum in Republika Srpska, and has reportedly summoned the president of the entity, Milorad Dodik, for questioning.
The High Judicial and Prosecutorial Council of Bosnia and Herzegovina (VSTV BiH) said on September 28 it has temporary suspended chief prosecutor Goran Salihovic, following a request from the country’s Office of Disciplinary Council (UDT). The council provided no explanation, but local news outlet Klix.ba wrote on the same day that the chief prosecutor has been investigated on suspicion of abuse of office, apparently benefitting the president of Republika Srpska, Milorad Dodik.

Key points:
• CPI deflation slightly deepened to 1.2% y/y in August
• The working-day adjusted industrial production increased 7.2% y/y in June
• The foreign trade gap narrowed 3.3% y/y to BAM4.36bn (€2.23bn) in the first eight months of 2016


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