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.
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
- 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