SARAJEVO (Bosnia and Herzegovina), October 19 (SeeNews) – The World Bank has cut Bosnia’s 2017 economic growth forecast to 3.0% from previously predicted 3.2%.
Bosnia's GDP growth is expected to pick up to 3.2% next year, down from a June forecast of 3.7%, the World Bank said in its October 2017 Migration and Mobillity, Europe and Central Asia Economic Update.
For 2019, the lender cut its forecast for Bosnia's GDP growth from 4% to 3.5%, noting that it will continue to climb on the back of rising domestic demand.
The World Bank judged, however, that Bosnia's growth will be considerably lower than the estimated 6% it needs to catch up to EU income levels by 2037 and close the gap with other transition economies that are already part of the EU.
In terms of risks to Bosnia's growth, the lender said that the fiscal sector, which is still characterised by a high tax burden and inefficient patterns of spending, is a major threat.
"Political uncertainties that could hold back the reform agenda are the highest risk for the medium-term outlook," the World Bank also judged.
In terms of consumer prices, the lender predicted Bosnia to turn to an inflation of 0.9% in 2017 from a deflation of 0.8% last year. Inflation is expected to accelerate to 1.4% in 2018, where it will remain in 2019.
Bosnia's GDP expanded by 3.1% in 2016.