EXECUTIVE SUMMARY 5 REAL SECTOR 6 1.GDP 6 Bosnia’s GDP growth holds at 2.1% y/y in Q1 6 GDP growth in Bosnia’s Republika Srpska cools to 2.2% y/y in Q1 6 2. Inflation 7 Bosnia’s CPI deflation stays at 1.5% y/y in June 7 Bosnia’s industrial producer prices flatten in June 7 Bosnian Federation's industrial PPI declines by 2% y/y in June 8 Bosnian Federation's CPI deflation eases to 1.5% y/y in June 8 Deflation in Bosnia’s Republika Srpska holds at 1.6% y/y in June 8 Industrial producer prices in Bosnia’s Republika Srpska rise 3.3% y/y in June 9 3. Industry and Trade 9 Bosnia’s retail sales growth slows to 3.5% y/y in May 9 Bosnian Federation’s industrial production rises 8.5% y/y in June 9 Bosnian Federation’s retail sales ease annual fall in June 10 Industrial production growth in Bosnia’s Republika Srpska slows in June 10 Retail sales growth in Bosnia’s Republika Srpska improves in June 11 4. Tourism 11 Foreign tourist arrivals in Bosnia rise 13.7% y/y through May 11 Bosnia’s Republika Srpska reports 16.3% y/y increase in foreign tourist arrivals in H1 11 Foreign tourist arrivals to Bosnian Federation fall 7.9% y/y in June 12 5. Labour Market 12 Bosnia’s average net wage turns to growth in May 12 Unemployment rate in Bosnia to fall to 25.4% in 2016, labour force survey shows 13 Number of unemployed in Bosnia falls 3.4% y/y in May, statistics office says 13 Bosnian Federation's real net wage rises 2.6% y/y in May 13 Bosnia’s registered unemployment rate falls to 41.7% in May 14 Unemployment rate in Bosnia’s Republika Srpska to reach 24.8% in 2016, survey shows 14 Real wage grows 1.8% y/y in June in Bosnia’s Republika Srpska 15 FISCAL SECTOR, MONETARY POLICY 15 Bosnia’s indirect tax revenue rises 1.75% y/y to €1.87bn 15 Bosnian Federation’s H1 public revenues rise 11.2% y/y 15 Bosnian Federation’s H1 budget revenue at 38% of end-year target 16 Bosnia’s Republika Srpska sells out €20.5mn 5-year T-bond issue 16 Bosnia’s Republika Srpska 7-mo public revenues fall 1% y/y 16 FINANCIAL INTERMEDIATION 17 Bosnia’s M1 money supply grows 11.5% y/y at end-May 17 Bosnia’s FX reserves grow 7.3% y/y at end-May 17 Bosnia’s bank assets slow annual growth in May to 3.7% 18 Bosnian bank deposits grow 7.7% y/y at end-May 18 EXTERNAL SECTOR 18 Bosnia’s foreign trade deficit narrows 2.1% y/y in H1 18 Bosnian Federation’s H1 foreign trade gap expands 4% 19 Bosnian Federation’s public debt stays at €3.2bn in H1 19 Foreign trade deficit in Bosnia’s Republika Srpska narrows 17% y/y in H1 20 STRUCTURAL REFORMS, CORPORATE PLANS 20 Bosnia pledges to cut public sector, strengthen banking system to get IMF deal 20 Bosnian Federation likely to further lower price for state's stake in Sarajevo Osiguranje 22 IMF urges Bosnia to send letter of intent within days to get new loan deal 22 EBRD lends Bosnia €65mn for road upgrades 23 Serbia’s Delta Holding to build €60mn shopping centre in Bosnia 23 Agram Group reportedly offers €10.2mn for Bosnian insurer Sarajevo Osiguranje 24 Suspected misuse of EIB funds probed in Bosnia’s Republika Srpska 25 Bosnian parliament rejects legislation to save public broadcaster BHRT 26 Bosnian Federation to offer stake in drug producer Bosnalijek on Sarajevo bourse 26 Bosnian utility EPBiH to launch project for new unit at Tuzla TPP by year-end 27 Bosnia to lose out on new IMF deal after failing to send letter of intent 28 Attempt to sell state's stake in Bosnian drug producer Bosnalijek fails on lack of bidders 29 Bosnia clears way to much needed loan deal with IMF 29 World Bank lends Bosnian Federation €58mn for road sector modernisation 30 Russia bans imports from Bosnia on lack of production security 31 Bosnian Federation offers state stake in tobacco maker Fabrika Duhana Sarajevo for sale 31 POLITICS 32 Bosnian court says Republika Srpska’s banking regulator illegally withholds data on Banka Srpske 32 IMF delays new €550mn loan deal with Bosnia 33 Bosnia’s Republika Srpska reportedly to call referendum on banned Republic Day holiday 34 Bosnia’s Republika Srpska to announce own version of 2013 census results 35 Srebrenica massacre commemoration reveals rift between Bosnian entities 36 Bosnia’s Republika Srpska could sign SAA adjustment, RS President Dodik says 37 President of Bosnia’s Republika Srpska sets referendum date for Sept 25 38 Bosnia allows EU members to import duty-free agricultural products 39 Constitutional court of Bosnia’s Republika Srpska to rule on referendum, census results 40 Bosnian Croats seek amendments before supporting coordination mechanism in parliament 41 Bosnia denies receiving information on Russia import ban
Bosnia and Herzegovina Country Report - July , 2016 Description
Bosnia and Herzegovina Country Report - July , 2016
This report covers the main macroeconomic releases from July 6 until August 5, 2016 as well as the financial and political events that took place in Bosnia during this period.
Bosnia & Herzegovina has pledged to undertake a number of reforms aiming to improve fiscal and banking stability in order to strike a new deal with the International Monetary Fund (IMF), according to the country’s letter of intent that is yet to be signed by two of three authorities.
Meanwhile, Bosnia & Herzegovina failed to send a properly signed letter of intent to the International Monetary Fund (IMF) by the deadline that expired on July 21, losing the chance to sign a new agreement with the fund.
Ten days later, on July 31, Bosnia sent a properly signed letter of intent to the IMF) on July 31, clearing its way to sign a new agreement with the fund.
The use of €50mn in funding wired to Investment and Development Bank (IRB) - the state development bank of Bosnia & Herzegovina’s smaller entity, Republika Srpska - from the European Investment Bank (EIB) is being investigated.
The government of Bosnia & Herzegovina’s smaller entity – Republika Srpska – has adopted a special law on analysing and announcing its own version of the 2013 census results. The entity refused to acknowledge the results announced by the state-level statistics office on June 30, claiming that the methodology used for processing of the data was wrong.
While thousands of Bosnians gathered to commemorate the victims of the Srebrenica massacre on July 11, many Bosnian Serbs including top politicians still deny that this was the bloodiest massacre since the Holocaust. The genocide was not marked by officials in Republika Srpska – the Serb-dominated smaller entity that makes up Bosnia & Herzegovina together with the Muslim-Croat Federation.
CPI deflation held at .5% y/y in June
The retail sales, measured at constant prices, increased by 3.5% y/y in May
The foreign trade gap narrowed 2.1% y/y to BAM3.2bn (€1.6bn) in the first half of 2016