The EBRD has downgraded Bosnia's 2012 GDP growth forecast by 0.2pps to 0.1% in its latest Regional Economic Prospects report issued yesterday (October 25), compared to the previous one released in July. In 2013 the EBRD expects the Bosnian economy to recover growth of only 0.4%, down from 0.6% in the previous report. The EBRD said Bosnia's economy has been relatively stable in the past couple of years. However domestic consumption has remained subdued held back by fiscal austerity measures, falling remittances and slow credit growth. Furthermore, high frequency indicators point to a substantial weakening of the economy in 2012, the Bank said. On the positive side, the new IMF stand-by arrangement (24 months, USD 520.6mn) provides a solid anchor for structural reforms and a buffer against external shocks from the eurozone crisis. The EBRD's 2012 growth forecast for Bosnia is broadly in line with the latest IMF projections published in early October, according to which the country's GDP growth will stand at 0.2% in 2012. However, the EBRD's projection for next year is less optimistic (0.4% vs. 1% in 2013 of the IMF). Compared to the EBRDs region of South-eastern Europe (which also includes Albania, Bosnia, Bulgaria, Macedonia, Montenegro and Romania), Bosnia's GDP growth for the period 2012-2013 is below the regions average of respectively 0.4% and 1.6%.
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