EBRD cuts Bosnia's 2024 GDP growth projection to 2.8%

Bosnia's economic growth this year will be driven by household consumption, foreign investment and services, with limited potential from infrastructure projects and construction due to labour market constraints and project approval uncertainties, the EBRD said in its May 2024 Regional Economic Prospects report. Growth may also be affected by risks from adverse weather conditions.

While the country's industrial production declined in the first two months of 2024, tourism and retail trade are growing, boosted by lower inflation, the EBRD noted, adding that imports of goods increased during the period on the back of elevated domestic demand, while exports fell.

The growth outlook for 2025 anticipates an increase to 3%, driven by improved external demand and the execution of significant investment initiatives.

Bosnia and Herzegovina's economy grew by 1.7% in 2023, as global and domestic political uncertainty weighed, the lender said.

The EBRD expects the economic growth of the Western Balkans region where Bosnia and Herzegovina belongs to pick up to 3.3% in 2024 from the estimated rate of 2.5% in 2023, before accelerating further to 3.7% next year.