This report covers the main macroeconomic releases from June 3 until July 7, 2014 as well as the financial events that took place in Bosnia during this period.
The IMF downgraded its forecast for Bosnia's 2014 economic growth to 0.7% from 2.0% as a result of the mid-May floods. The Fund sees the damage they caused to the country at 5-10% of GDP. The total flood damage, including economic losses, is estimated at EUR 1-1.5bn.
On the economic front, consumer prices declined for the tenth month in a row in May 2014 but at a slightly slower rate than in April. The producer price index (PPI) on the domestic market inched down 0.9% y/y in April, widening from a 0.6% y/y decline in March.
Bosnia’s jobless rate edged down to 43.7% at end-April 2014 from 44.1% a month earlier. Also, it was lower compared to its end-2013 level of 44.5%.
Bosnia’s consolidated budget swung into a net surplus of BAM 81.8mn (EUR 41.8mn) in the first quarter of 2014 from a BAM 66.2mn deficit a year ago. The three-month budget surplus was equal to 0.3% of the full-year GDP forecast, the same as a year earlier.
Bosnia’s government sector foreign debt rose 2.6% q/q to BAM 7.6bn (EUR 3.89bn) at end-March 2014, supported mainly by rising liabilities to the EIB, the EBRD and the World Bank.
The central bank’s gross foreign reserves grew 10.8% y/y to BAM 7.09bn (EUR 3.63bn) at end-May 2014, slightly easing from an 11.0% y/y hike the month before. The reading equalled to 26.1% of the full-year GDP projection.
The commercial banks’ assets rose 5.1% y/y to BAM 23.6bn (EUR 12.1bn) at end-May 2014, quickening from a 4.8% annual growth the month before mainly supported by stronger lending activity. The assets accounted for 87.1% of the full-year GDP forecast, up from 84.8% a year ago.