Bosnia-Herzegovina Country Risk Report Q1 2020

Bosnia-Herzegovina Country Risk Report Q1 2020

We remain largely pessimistic about Bosnia's political outlook, with little to suggest an imminent improvement in stability as the main parties remain dead-locked a year after the October 2018 election.

The political deadlock will complicate efforts to tackle key short-term policy challenges, including a surge in migrant arrivals, which in turn could feed back into existing ethnic tensions.

We expect real GDP growth in Bosnia to stage a modest recovery in 2020 following a slowdown in 2019, though risks have tilted more to the downside in recent months.

We see resilient domestic demand supporting subdued but steady growth over the medium term, though structural reforms are required to improve the business climate.

Major Forecast Changes

We have lowered our forecasts for growth to 2.8% in 2019 and 3.0% in 2020, from 2.9% and 3.3% respectively, due to waning external demand, industrial sector weakness and ongoing political risks.

Key Risks

Escalating tensions between Bosnia's ethnic communities and its two autonomous entities pose an underlying threat to national unity and security.

A weakening EU anchor, which has been a rare area of common ground in recent years, represents a further downside risk, leaving the country more exposed to wider geopolitical manoeuvrings.

Further cuts to our short-term forecasts for Germany and Italy, Bosnia's two main export markets, would threaten the anticipated recovery 2020.


Executive Summary
Core Views
Major Forecast Changes
Key Risks
Country Risk Summary
Economic Risk Index
Political Risk Index
SWOT
Economic – SWOT Analysis
Political – SWOT Analysis
Economic Outlook
Economic Growth Outlook
External Headwinds To Weigh On Growth In Bosnia
GDP By Expenditure Outlook
TABLE: GDP GROWTH FORECASTS
TABLE: PRIVATE CONSUMPTION FORECASTS
TABLE: GOVERNMENT CONSUMPTION FORECASTS
TABLE: FIXED INVESTMENT FORECASTS
TABLE: NET EXPORTS FORECASTS
Outlook On External Position
TABLE: CAPITAL & FINANCIAL ACCOUNT BALANCE
TABLE: CURRENT ACCOUNT BALANCE FORECASTS
TABLE: TOP FIVE GOODS EXPORTS IN 2018
TABLE: TOP FIVE GOODS IMPORTS IN 2018
Monetary Policy Framework
TABLE: MONETARY POLICY FORECASTS
Structural Fiscal Position
TABLE: FISCAL AND PUBLIC DEBT FORECASTS
TABLE: MAIN REVENUE AND EXPENDITURE CATEGORIES
10-Year Forecast
The Bosnian Economy To 2028
Politics Still The Main Obstacle To Long-Term Economic Convergence
TABLE: LONG-TERM MACROECONOMIC FORECASTS
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS MACRO RESEARCH and is NOT a comment on Fitch Ratings’ Credit Rating. Any comments or data included in the report are solely derived from Fitch Solutions Macro Research and independent sources. Fitch Ratings’ analysts do not share data or information with Fitch Solutions Macro Research.Bosnia & Herzegovina Country Risk Q1 2020ContentsPolitical Outlook
Domestic Politics
Gloomy Outlook For Bosnia's Political Climate
Long-Term Political Outlook
Ethnic Divisions To Undermine Stability
Operational Risk
TABLE: OPERATIONAL RISK
Economic Openness
TABLE: TARIFF AND NON-TARIFF TRADE BARRIERS
TABLE: FREE TRADE AGREEMENTS
TABLE: FREE TRADE ZONES AND INVESTMENT INCENTIVES
TABLE: BARRIERS TO FDI
Utilities Network
TABLE: ELECTRICITY RISKS
TABLE: FUEL RISKS
TABLE: TELECOMMUNICATIONS RISKS
TABLE: WATER RISKS
Global Macro Outlook
Manufacturing Weakness And Rising Political Risk To Weigh On Growth
TABLE: GLOBAL MACROECONOMIC FORECASTS (2018-2023)
TABLE: DEVELOPED MARKETS – REAL GDP GROWTH, % y-o-y
TABLE: EMERGING MARKETS – REAL GDP GROWTH, % y-o-y
Index Tables
TABLE: BOSNIA-HERZEGOVINA – MACROECONOMIC DATA & FORECASTS

Download our eBook: How to Succeed Using Market Research

Learn how to effectively navigate the market research process to help guide your organization on the journey to success.

Download eBook