Bosnia’s economy needs to grow at a faster pace to attain convergence with European Union living standards, but economic reforms may lose momentum this year due to elections, the central bank governor told Reuters.
Governor Senad Softic said he expected growth to have reached around 3 percent in 2017, the same level as in the previous two years, but did not provide projections for 2018: “With such growth rates we cannot expect significant changes in living standard. We need a more significant growth of 5 percent over a long period.”
The International Monetary Fund estimated Bosnian growth in 2017 at 2.5 percent and forecast 2.6 percent for 2018. The World Bank’s figures are 3.0 percent and 3.2 percent, respectively. Softic said he expected direct foreign investment to have reached KM 700 million in 2017, up about 45 percent from the previous year.
Developments this year would however depend on how the reform program fared, the pace of economic recovery in the euro zone – Bosnia’s key trade partner – and trends on global markets.
“It is essential to direct resources in the economic development of the country, the process of European integration and reforms,” said Softic.
“But this is an election year and the focus may rather be on political than on economic issues.”