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EBRD lowers Bosnia's economic growth fcast due to delays in IMF deal

Author Maja Garaca
EBRD lowers Bosnia's economic growth fcast due to delays in IMF deal Author: EBRD. License: All rights reserved.

SARAJEVO (Bosnia and Herzegovina), May 10 (SeeNews) - The European Bank for Reconstruction and Development (EBRD) said on Wednesday it lowered Bosnia's economic growth forecast for 2017 to 2.5% from 3% projected earlier.

EBRD's decision was largely influenced by Bosnia's failure to complete the first review of the 3-year International Monetary Fund programme, it said in its latest Regional Economic Prospects report.

"Some positive trends have been recorded in high frequency data in the first months of 2017, notably in exports, but completion of the first review of the 3-year IMF programme has been held up for several months, delaying implementation of some key infrastructure projects and jeopardising their funding," the EBRD noted.

The fund added that Bosnia's economy is expected to bounce back and achieve growth of 3% in 2018.

The lender warned, however, that downside risks to this forecast are significant if the IMF programme remains delayed or goes off track and if important structural reforms are postponed.

Bosnia's GDP growth slowed down to 2.0% in 2016 from 3.0% a year earlier, reflecting a levelling off in the wholesale and retail sector and a small decline in public sector spending.

EBRD projects the economies of Southeast Europe will achieve growth of 3.1% in 2017 and 3.0% next year.