SARAJEVO (Bosnia and Herzegovina), January 27 (SeeNews) – The Croatian unit of Raiffeisenbank Austria said on Friday that Bosnia is likely to turn to inflation as early as the first quarter, after ending 2016 with an annual deflation of 1.1%.
Bosnia is headed strongly into black territory and is expected to finish the year with an annual inflation rate of 2.0%, RBA said in its CEE weekly report.
The lender's analysts noted that Bosnia narrowed its 2016 trade deficit by 2.1% to 6.7 billion marka ($3.6 billion/3.4 billion euro), making it the lowest nominal trade deficit since 2010.
"The narrowing of the trade gap was in line with expectations as goods exports performed much better than good imports during most of the year," RBA commented.
Strong foreign demand for Bosnian goods pushed overall industrial production up by 4.3% in 2016, RBA said. "This is Bosnia's fourth straight year of expansion and the strongest reading since 2013".
Industrial production accounts for around 18% of Bosnia's GDP and therefore represents a key macro indicator for overall economic projection.
Bosnia's government projects the country's GDP will expand by 3.4% in 2017.
(1 euro=1.95583 marka)