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 in Bosnia and Herzegovina has once again proved resilient to negative shocks, including the marked slowdown in reforms in the past year. Economic growth estimates for 2016 have been revised upwards recently to 3.2 per cent, and the economy continued to grow in the first half of 2017 albeit at a slower rate, estimated at 2.2 per cent year-on-year. The slowdown was driven by a weaker performance of the agricultural and construction sectors compared to the same period of last year, as well as a levelling off of the industry sector.
 
The first review of the IMF programme is still on hold, pending the completion of several prior actions and, as a result, implementation of some key infrastructure projects, including Corridor Vc, is delayed. We are therefore leaving our growth projections for 2017 and 2018 unchanged relative to May, at 2.5 and 3 per cent respectively, while noting the significant downside risks if the country’s reform agenda remains stuck.