Bosnia’s current account deficit shrank 39.8% to BAM 1,435.4mn (EUR 734mn) in 2013 after declining 5.1% the year before, mainly due to falling foreign trade gap and higher investment income from abroad, central bank data showed. The 2013 current account gap equalled to 5.5% of the full-year GDP forecast, down from 9.3% a year ago, according to IntelliNews calculations.

The foreign trade deficit improved to 29.7% of GDP (BAM 7.8bn) from 32.9% of GDP (BAM 8.4bn) a year earlier as exports increased while imports declined over the period. Sales abroad rose markedly by 8.7% to BAM 5.5bn in 2013. Imports, on the other hand, contracted by 1.5% to BAM 13.3bn, reflecting subdued domestic demand.

Higher primary income account surplus which was underpinned by rising investment revenue (up 7.4% to BAM 113.1mn) also contributed to the 2013 gap narrowing. The surplus of the service account, likewise, increased by 3.1% on the year to BAM 2.3bn as higher income from tourism offset falling construction and processing services revenue.

The surplus of the financial account shrank 54.1% to BAM 832.7mn last year. Net FDI rose a mild 5.1% to BAM 507.1mn over the period. They covered over 35% of the current account deficit, up from 22% the year before.

According to the IMF, Bosnia's current account gap will continue narrowing in 2014 reflecting rising exports and weak domestic demand contributing to slow import growth.