Bosnia and Herzegovina Economic Forecast

Bosnia Economic Outlook

May 12, 2020

The economic situation turned dire over the last month as the Covid-19 crisis pummeled activity. Merchandise exports declined over 14% year-on-year in March on flagging demand from key European trading partners, with output in the industrial sector consequently sinking in the same month as manufacturing output recoiled. Exacerbating matters, remittance inflows are expected to ebb significantly in the wake of ongoing crises abroad. In late April, the IMF approved a roughly EUR 333 million emergency loan to help the country meet an urgent balance-of-payments need. Moreover, the government of the Bosniak-Croat Federation scaled up its 2020 budget around 11% to BAM 5.5 billion in mid-April to accommodate higher spending in response to the crisis. Reflecting the economic fallout and an expected deterioration in the country’s fiscal metrics, S&P Global Ratings downgraded the outlook of its B credit rating to stable from positive on 30 April.

Bosnia and Herzegovina Economic Growth

The economy will severely contract this year. Domestic demand is set to drop on falling consumer spending and investment, while depressed demand from the Euro area will cripple the external sector. The magnitude of the domestic outbreak and the duration of the Euro area recession will be key determinants in the outlook. FocusEconomics panelists project GDP to contract 5.5% in 2020, which is down 6.4 percentage points from last month’s forecast, and to grow 3.5% in 2021.

Bosnia and Herzegovina Economy Data

2014 2015 2016 2017 2018
Population (million)3.63.53.53.53.5
GDP per capita (USD)5,3904,7674,9925,3215,868
GDP per capita (EUR)4,0644,2984,5144,7194,973
GDP (EUR bn)14.515.215.916.517.4
Economic Growth (GDP, annual variation in %)0.74.13.43.03.4
Consumption (annual variation in %)1.91.82.20.82.5
Investment (annual variation in %)11.5-3.52.55.89.2
Industrial Production (annual variation in %)0.33.14.53.11.6
Unemployment Rate27.527.725.420.518.4
Fiscal Balance (% of GDP)-2.00.71.22.62.3
Public Debt (% of GDP)45.945.544.139.234.3
Inflation Rate (CPI, annual variation in %, eop)-0.5-1.3-0.50.71.6
Inflation Rate (CPI, annual variation in %)-0.9-1.1-1.60.81.4
Exchange Rate (vs USD)1.621.801.851.631.71
Exchange Rate (vs USD, aop)1.471.761.771.731.66
Current Account (% of GDP)-7.3-4.9-4.5-4.2-3.6
Current Account Balance (EUR bn)-1.0-0.7-0.7-0.7-0.6
Trade Balance (EUR billion)-4.0-3.7-3.6-3.8-3.8
Exports (EUR billion)3.53.73.94.85.3
Imports (EUR billion)7.57.37.68.69.2
Exports (annual variation in %)3.15.17.021.311.5
Imports (annual variation in %)7.1-2.42.913.36.9
International Reserves (EUR)4.04.44.95.45.9
External Debt (% of GDP)27,17382.682.282.177.0

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Bosnia and Herzegovina Facts

Value Change Date
Exchange Rate1.74-0.65 %Dec 31
Stock Market0.50.0 %Jan 07

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