Bosnia and Herzegovina overview

Cityscape

In Bosnia and Herzegovina we focus on:

Restructuring and expansion of the local private sector: Bosnia and Herzegovina has a strong industrial heritage, an abundant supply of energy, and significant resources to support processing industries. The EBRD will target local and foreign companies for investments in the country and provide financing for restructuring and expansion of smaller local companies. We will provide SME credit lines through local banks, microfinance loans and non-financial support.

Forging closer linkages with wider regional markets: A small open economy such as Bosnia and Herzegovina's can reach its full economic potential only by integrating closely with wider regional markets. Regional integration, both physical and commercial, will become even more important in the new strategy period as Bosnia and Herzegovina now has a border with the EU as of 1 July 2013, following Croatia’s accession to the EU. The EBRD will support private investments, increased trade flows and infrastructure improvements deepening regional integration. We will encourage greater private sector involvement in public infrastructure upgrades and put a strong emphasis on improvements of standards towards EU norms.

Promoting a more efficient and sustainable use of resources: Public entities and private companies make very inefficient use of existing resources, resulting in unnecessarily high energy costs and significant environmental damage. To support more efficient and sustainable use of resources, the Bank will focus on sustainable energy investments with high demonstration effects. The Bank will provide direct financing for energy and resource efficiency improvements for large corporate clients, both in the private and public sectors, and for the restructuring and commercialisation of municipal utility companies. The Bank will continue an active policy dialogue on sustainable use of resources, using technical assistance, in close cooperation with other donors.
 
The EBRD’s latest Bosnia and Herzegovina strategy was adopted on 5 July 2017
 

EBRD forecast for Bosnia and Herzegovina’s real GDP Growth in 2017 2.5%

EBRD forecast for Bosnia and Herzegovina's real GDP growth in 2018 3.0%

The economy of Bosnia and Herzegovina continued to grow in 2016 but at a slower rate than in the previous year. Growth for the year as a whole is estimated at 2 per cent, compared to 3 per cent in 2015. The slowdown of growth was driven by a levelling off in the wholesale and retail sector, and a small decline in public sector spending. However, the industry sector continued to grow at a robust rate and was a major driver of GDP growth.

Also, the economy has been boosted by several major projects in the transport and energy sectors (in particular the Corridor Vc motorway project). Some positive trends have been recorded in high-frequency data in the first months of 2017, notably in exports, but completion of the first review of the 3-year IMF programme has been held up for several months, delaying implementation of some key infrastructure projects and jeopardising their funding. We have thus lowered our projection for 2017 to 2.5 per cent, rising to 3 per cent in 2018. Downside risks to this forecast are significant if the IMF programme remains delayed or goes off track and if important structural reforms are postponed.