Bosnia and Herzegovina Economic Forecast

Bosnia Economic Outlook

October 6, 2020

The economy took a severe hit in the second quarter as it felt the full brunt of Covid-19 containment measures. GDP fell 9.3% year-on-year, following Q1’s 2.0% expansion, weighed on by plunging domestic and external demand. On the domestic side, investment activity contracted by over a fifth, while household spending shrank markedly; meanwhile, on the external front, exports slumped by almost a third. Moving to Q3, available data points to protracted weakness. The unemployment rate rose and retail sales contracted at a sharper pace in July, indicating constrained household spending. Moreover, industrial production continued to fall at a double-digit rate in July-August, reflecting downbeat private sector activity. Meanwhile, data from the Civil Aviation Directorate shows that passenger traffic was down around 80% year-on-year in August, spelling trouble for external demand.

Bosnia and Herzegovina Economic Growth

The economy is projected to shrink markedly this year as the Covid-19 pandemic takes its toll on activity. Suppressed foreign demand and plummeting tourism revenues are set to weigh on the external sector. That said, the economy should return to growth in 2021 as global activity recovers. Further waves of the virus pose the main downside risk. FocusEconomics panelists project GDP to contract 5.3% in 2020 and to grow 3.8% in 2021, which is down 0.2 percentage points from last month’s forecast.

Bosnia and Herzegovina Economy Data

2015 2016 2017 2018 2019
Population (million)3.53.53.53.53.5
GDP per capita (USD)4,7674,9925,3165,8575,839
GDP per capita (EUR)4,2984,5144,7144,9655,217
GDP (EUR bn)15.215.916.517.418.3
Economic Growth (GDP, annual variation in %)4.13.43.23.32.6
Consumption (annual variation in %)1.82.21.12.32.4
Investment (annual variation in %)-3.52.55.89.2-  
Industrial Production (annual variation in %)3.14.53.11.6-5.5
Unemployment Rate27.725.420.518.415.7
Fiscal Balance (% of GDP)0.71.22.62.3-  
Public Debt (% of GDP)45.544.139.234.3-  
Inflation Rate (CPI, annual variation in %, eop)-1.3-0.50.71.60.2
Inflation Rate (CPI, annual variation in %)-1.1-1.60.81.40.6
Exchange Rate (vs USD)1.801.851.631.711.74
Exchange Rate (vs USD, aop)1.761.771.731.661.75
Current Account (% of GDP)-4.9-4.5-4.2-3.6-3.5
Current Account Balance (EUR bn)-0.7-0.7-0.7-0.6-0.6
Trade Balance (EUR billion)-3.5-3.4-3.6-3.8-4.1
Exports (EUR billion)4.64.85.76.15.9
Imports (EUR billion)8.18.39.39.910.0
Exports (annual variation in %)3.54.817.47.6-3.4
Imports (annual variation in %)-2.12.012.56.01.2
International Reserves (EUR)4.44.95.45.96.4
External Debt (% of GDP)82.682.282.277.1-  

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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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