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Bosnia & Herzegovina Country Report - February, 2016

Bosnia & Herzegovina Country Report - February, 2016

This report covers the main macroeconomic releases from February 6 until March 5, 2016 as well as the financial and political events that took place in Bosnia during this period.
Bosnia & Herzegovina formally applied on February 15 to join the European Union after several months of delay. The country hopes to get a Euopean Union candidate status in 2017, according to Mladen Ivanic, member of the country’s tripartite presidency
The president of Bosnia & Herzegovina’s smaller entity, Republika Srpska, has put on hold plans for a controversial referendum on the authority of the state-level judicial institutions. The move was seen by local analysts and politicians as a climbdown by president Milorad Dodik following heavy international pressure.
The Council of Europe’s Group of States against corruption (GRECO) criticised Bosnia for the delays in its anti-corruption reform agenda, which were a consequence of the lack of political will and of the fragmented and uncoordinated institutional framework.
Bosnia is expected to launch tenders for the construction of two stretches along the international transport Corridor Vc, worth €105mn
Turkish private company Capital Group plans to invest €300mn in the construction of photovoltaic power stations in Bosnia.
The European Broadcasting Union (EBU) said it has called for joint actions with the European Union to prevent the financial collapse of Bosnia’s public broadcaster, BHRT.

Key points:
CPI deflation softened to 0.8% y/y in January
The retail sales, measured at constant prices, increased by 7.7% y/y in January
The foreign trade gap narrowed 15.3% y/y to BAM282.8mn (€144.5mn) in January

1. Inflation 6
Bosnia’s CPI deflation narrows to 0.8% y/y in January 6
Bosnian Federation CPI deflation eases further in January 6
Bosnian Federation industrial PPI declines by 1.5% y/y in January 6
Bosnia’s Republika Srpska CPI deflation eases in January 7
Bosnia’s Republika Srpska industrial PPI inches down 0.2% y/y in January 7
2. Industry and Trade 8
Bosnia’s retail sales growth slows to 7.7% y/y in January 8
Bosnian Federation’s retail sales growth slows to 0.6% y/y rise in January 8
Bosnian Federation’s industrial production turns to decrease in January 9
Bosnia’s Republika Srpska retail sales rise 12.4% y/y in January 9
Bosnia’s Republika Srpska Jan industrial production deepens annual decline 9
3. Tourism 10
Foreign tourist arrivals to Bosnia rise 26.5% y/y in 2015 10
Foreign tourist arrivals to Bosnian Federation rise 3.4% y/y in January 10
Bosnia’s Republika Srpska reports 17.2% y/y increase in foreign tourist arrivals in January 11
4. Labour Market 11
Bosnia’s average net wage ticks down 0.1% y/y in December 11
Decline of Bosnia’s number of unemployed slows to 1.7% y/y in December – stats office 11
Bosnia’s registered unemployment rate rises to 42.9% in December 12
Bosnian Federation real net wage rises 0.9% y/y in December 12
Bosnia’s Republika Srpska real wage growth holds at 1.4% y/y in January 13
Bosnia raises excise duties on fuels, beer and cigarettes 13
Bosnia’s indirect tax revenue rises 2.1% y/y to €496.5mn through February 14
Bosnian Federation to borrow €454.5mn from international sources in 2016 14
Bosnia’s Republika Srpska raises €11.3mn from 3-year T-bonds 14
Bosnia's Republika Srpska sells one-month T-bills worth €14.6mn 15
Bosnia’s Republika Srpska sells out €10.2mn 7-year T-bonds 15
Bosnia’s Republika Srpska 2-mo public revenues fall 5.0% y/y 16
Bosnia’s FX reserves growth slows to 10% y/y at end-December 16
Bosnia’s M1 money supply growth boosts to 11.9% y/y at end-December 17
Bosnia’s bank deposits grow 7.5% y/y at end-December 17
Bosnia’s bank assets rise 3.7% y/y in December 18
Bosnia’s January foreign trade deficit narrows 15.3% y/y 18
Bosnian Federation’s January foreign trade gap narrows 12% y/y to €109.6mn 18
Bosnia’s Republika Srpska foreign trade deficit sinks 31% y/y in January 19
Bosnia to launch tenders for Vc motorway stretches in H1 – EBRD 19
Turkey’s Capital Group wants to invest €300mn in Bosnian renewable energy projects 19
Bosnia’s public broadcaster faces financial collapse 20
IMF reportedly seeks bankruptcy for Bosnia’s Banka Srpste as condition for new deal 20
Bosnia, IMF in final talks on new deal 21
Bosnia hopes to get EU candidate status in 2017 22
President of Bosnia’s Republika Srpska puts referendum on hold 22
Spat erupts as Bosnia prepares to apply for EU membership 24
Bosnia’s Republika Srpska urges central govt to abandon key document ahead of EU membership application 25
Bosnia formally applies for EU membership 26
Bosnian court replaces detention of top politician Radoncic with house arrest 28
President of Bosnia’s Republika Srpska hit by loan scandal 29
Bosnia’s prosecution claims top politician Radoncic violates house arrest 30
GRECO urges Bosnia to speed up anti-corruption reform 31
Bosnian court returns top politician Radoncic to detention

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