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.
EBRD forecast for Bosnia and Herzegovina’s real GDP Growth in 2023 1.5%
EBRD forecast for Bosnia and Herzegovina's real GDP growth in 2024 3.0%
The economy expanded by a modest 1.1 per cent year on year in the first quarter of 2023, on account of a slowdown in both external and domestic demand. Industrial output contracted in year-on-year terms, and the net export position worsened as the growth of imports exceeded that of exports. The current account deficit remained elevated in the first quarter. As household consumption contracted in the face of high inflation, growth relied on investment and services such as retail trade, tourism and information and communications. Annual inflation moderated to 4 per cent in July 2023 from 14.1 per cent in January 2023, mirroring global disinflation and reflecting slowing domestic demand. In order to protect disposable incomes, the Federation of Bosnia and Herzegovina set a maximum retail margin on certain foodstuffs, valid from September 2023. Fiscal policy remains 34 expansionary overall as the authorities have increased the minimum wage and pensions in both entities. GDP growth is expected at just 1.5 per cent in 2023, with significant downside risks, before recovering to 3.0 per cent in 2024. The short-term outlook is dimmed by the ongoing slowdown in key export markets, with industrial production contracting in year-on-year terms in the first half of 2023.