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2024/06/20 / Erste Group Research

Growth to remain subdued in 2024

Economic activity slowed to 1.6% y/y in 2023 as domestic drivers of growth softened, while external ones tumbled. High-frequency indicators, except for retail, indicate still subdued performance at the start of the year. we have downgraded our FY24 GDP forecast by 0.4pp to 1.8% y/y. Growth expectations for 2025 have now been upgraded by 0.5pp to 3.1% y/y reflecting expected stronger recovery of external demand.

Inflation decelerated faster than elsewhere in the region and continues to hover around 2% y/y since the end of last year. The decreasing external shocks effect and the strengthening of domestic price pressures are likely to continue in 2024.

Adverse developments in foreign trade present in 2H23 continued, and even deepened in the first quarter of 2024 with declining exports and an increase of the value of imports. We expect the trade gap will widen by roughly 1.2pp of the GDP in 2024, which will push the C/A gap towards 3% of the GDP.

According to data published in the Global Fiscal Framework from February 2024, general government revenues increased by 10.3% y/y in 2023, while expenditures rose 14% y/y thus leading to a general government gap of BAM 428mn or 0.8% of the GDP.

Despite Bosnia and Herzegovina’s progress towards European Union accession, Bosnian Serb authorities continue to ‘actively subvert’ the state, peace overseer Christian Schmidt said in his latest update to the UN secretary general. As we move closer to local elections scheduled for October we can expect a continuation of polarizing statements.

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General information

AuthorErste Group Research
Product nameCEE Country Macro Outlook
Topic in focusFX, Macro/ Fixed income
Economy in focus-
Currency in focus-
Sector in focus-


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