This report covers the main macroeconomic releases from December 6, 2014 until January 5, 2015 as well as the financial and political events that took place in Bosnia during this period.
The International Monetary Fund (IMF) said that Bosnia’s economic outlook remains uncertain due to the limited donors support.
Meanwhile, the European Commission will provide Bosnia additional €41mn to help the country recover from severe floods in May. The funds should be used for housing rehabilitation, SMEs and local economic development in flood affected areas.
The country’s bigger entity, the Federation, said its GDP swung to a 0.4% y/y growth in the third quarter of 2014 from a revised contraction of 0.5% y/y in the previous quarter. On the other hand, the Serb Republic’s economy contracted a real 0.1% y/y in the third quarter of 2014, narrowing from a revised decline of 1.3% y/y in the previous three months.
The Serb Republic has approved the new government following the October 12 elections. The candidate of the leading party in the Serb Republic – the Alliance of Independent Social Democrats (SNSD) – Zeljka Cvijanovic, remains the Prime Minister for a second term.
On the corporative front, China’s state-owned Eximbank and Bosnia’s Federation government have signed an agreement for a €667.8mn credit to be used for the construction of the 450MW unit 7 at the thermal power plant Tuzla.

Key points:
• Federation’s CPI increased by 0.3% y/y in November, the same as the month before.
• The Federation’s dropped by 1.5% y/y in November, narrowing from a 1.8% annual decrease in October. Serb Republic’s industrial output increased by 2.1% y/y in November, decelerating from a 6.6% y/y growth in October.
• Bosnia’s central bank gross foreign reserves rose 11% y/y to BAM7.644bn (€3.911bn) at end-October 2014, easing from 12.1% y/y hike at end-September