An International Monetary Fund mission completed today its latest visit to BiH, during which IMF officials discussed the Stand-By Arrangement with BiH leaders and assesses the state of the economy.
Despite earlier predictions that the impact of this year’s floods would drive BiH into recession, the IMF mission said in its statement that economic growth of nearly 1% could be expected.
The economic recovery appears to be more resilient than previously thought to the impact of the natural disaster that hit Bosnia and Herzegovina last May. Industrial production and exports have picked up and tax revenues have continued to recover. Even though growth is expected to reach close to 1 percent this year, the outlook remains subject to considerable uncertainty, including due to the limited disbursements of donor support for the reconstruction effort. Risks of a jobless recovery remain high as the roots of unemployment are predominantly structural.
The financial sector remains well capitalized and stable at the aggregate level, having withstood the impact the impact of the floods well. The mission welcomes the authorities’ swift response in addressing problems identified in a small bank, including through close coordination within the Standing Committee for Financial Stability.
