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IMF maintains Bosnia's 2024 GDP growth f'cast at 2.5%

Jun 20, 2024, 4:35:05 PMArticle by Dragana Petrushevska
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June 20 (SeeNews) - The International Monetary Fund (IMF) said on Thursday it expects Bosnia and Herzegovina’s economic growth to speed up to 2.5% in 2024, after an estimated rise of 1.7% last year, keeping its April projection unchanged.

IMF maintains Bosnia's 2024 GDP growth f'cast at 2.5%
Sarajevo. Photo by the tourism association of canton Sarajevo.

"Growth is projected to strengthen starting this year, albeit to levels that will not lead to convergence to the EU," the IMF said in a statement following Article IV consultation.

In 2025, Bosnia's economy is projected to grow by 3% year-on-year.

Despite high uncertainty around the outlook and greater downside risks—such as an abrupt slowdown in Europe, increased commodity price volatility, and rising domestic political tensions—progress on the EU accession path could provide a reform boost with positive spillovers, the IMF said.

The European Union leaders decided in March to open accession negotiations with Bosnia, eight years after the country applied to join the bloc.

IMF recommended Bosnian authorities need to reduce financing needs, prepare contingency plans, and implement fiscal reforms to rebuild buffers and improve spending quality.

Immediate action is needed for transitioning to green energy and preparing for EU carbon pricing, while governance, financial integrity, and anti-corruption reforms should be accelerated to boost growth and reduce emigration, the IMF noted.

According to the IMF, the central bank of Bosnia should further strengthen the reserve requirement framework by increasing remuneration rates on bank reserves, ensure full fulfillment of required reserves on foreign exchange deposits, and narrow the gap with euro area interest rates to contain capital outflows and reduce inflation.

According to Bosnia's statistical office, the country's gross domestic product (GDP) grew by a real 1.6% year-on-year in 2023.

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