Political uncertainty remains the main risk to Bosnia & Herzegovina’s medium-term outlook as the lack of agreement between entities could delay reforms, the World Bank said in the October edition of its Europe and Central Asia Economic Update.
Yet, the country is making a progress on its Reform Agenda, a wide-reaching reform package intended to support Bosnia’s progress towards EU accession, and domestic demand is rising, which will support the GDP in 2017-2019.
Rising domestic demand is expected to remain the main driver for Bosnia’s economic growth, which is seen above 3.0% a year in the medium term. GDP is expected to rise by 3% this year, slightly down from an estimated 3.1% in 2016, but should accelerate to 3.2% next year and to 3.5% in 2019.
“This is considerably lower than the estimated 6 percent growth needed for BiH to catch up to EU income levels by 2037 and close the gap with other transition economies that are already part of the EU,” the report noted.
The global lender projected that investments in the country will post a moderate growth rise due to slow improvements in the business environment, delays in the construction of transport corridor Vc and projects in the energy and tourism sectors, as well as uncertainty about tax reform implementation.
| World Bank's macroeconomic outlook for Bosnia | ||||
| 2016e | 2017f | 2018f | 2019f | |
| GDP growth | 3.1% | 3.0% | 3.2% | 3.5% |
| - Private consumption | 1.8% | 2.9% | 3.4% | 3.6% |
| - Government consumption | 1.8% | 3.7% | 3.4% | 2.6% |
| - Gross fixed capital investment | 1.7% | 1.6% | 2.9% | 3.5% |
| Inflation | -0.8% | 0.9% | 1.4% | 1.4% |
| Current account balance (% of GDP) | -4.5% | -4.6% | -5.9% | -6.8% |
| Debt (% of GDP) | 41.1% | 39.5% | 37.9% | 35.8% |
| Source: the World Bank | ||||
Related Articles
Orban’s new illiberal axis
Amid the furore over Hungarian Prime Minister Viktor Orban’s visit to Tbilisi immediately after the allegedly stolen October 26 general election, a visit by the country’s President Tamas ... more
EIF signs guarantee agreements with 11 banks in Western Balkans, unlocking €750mn for small businesses
The European Investment Fund (EIF), part of the EIB Group, said on April 15 that it has signed guarantee agreements with 11 banks and financial intermediaries in the Western Balkans. These ... more
EIB surpasses investment milestone in the Western Balkans by investing €1.2bn in 2023
EIB Global, the financial arm of the European Investment Bank (EIB) for activities beyond the EU, set a new record by investing €1.2bn in the Western Balkans in 2023, the EIB said on February 9. ... ... more
Most Read
-
Putin to skip Rio BRICS summit over ICC warrant as Xi signals no-show
10 days ago
-
Turkey yet to prove rare earth deposit has suggested “giant” potential despite reported processing talks with China
10 months ago
-
Uproar in Mongolia as development bank reveals scale of risky loans and NPLs
3 years ago