Key developments and challenges

Economic growth has been weak but some progress has been made on policies. Only minimal growth has been recorded over the past year. Following the finalisation of the state and entity budgets, progress was made towards re-engaging with the IMF, culminating in the signing of a new programme.

Private sector involvement in the road sector is advancing. A tender for a public-private partnership (PPP) in the transport sector based on best international practice has been announced for a concession of a section of a key international transport corridor in Republika Srpska.

Non-performing loans (NPLs) are rising in the banking sector, but liquidity remains sound. The level of NPLs still remains below that of some regional peers and the direct impact of the international financial crisis on the local banking sector has been limited so far.