Growth is expected to be driven primarily by higher exports, supported by strengthened foreign demand and increased private consumption due to rising real incomes as inflation continues to decelerate, the World Bank said in its latest Economic Update for Europe and Central Asia report.
The World Bank expects Bosnia's GDP to grow by 3.3% in 2025.
The outlook is clouded by downside risks, including potential escalation of market disruptions and uncertainty due to the war in Ukraine and volatility in the Middle East, which could reignite inflationary pressures, impact the fragile EU recovery, and affect demand for Bosnian exports.
Furthermore, geopolitical conditions pose a risk of exacerbating domestic political frictions, undermining the much needed push for economic structural reforms, the World Bank said.
The Western Balkans' economies are seen expanding by 3.2% in 2024, following an estimated 2.6% regional economic growth in 2023.