Page 36 - SE Outlook Regions 2023

external environment and an anticipated economic slowdown in the
second half of 2022 and into 2023 in Eurozone export markets are
serious risks to Bosnia’s economic growth.

Bosnia’s state Directorate for Economic Planning (DEP) has projected
that the economy will rise by around 3.2% on average in the period
2023-2025. In 2023, the growth is seen at 3.1%, while in 2024 it should
reach 3% and in 2025 3.4%. During that period, domestic demand,
boosted mainly by private consumption, is expected to be the main
driver of economic growth.

On the other hand, public spending is expected to contract and its
share in GDP will fall. If Bosnia implements planned reforms, that would
boost investment and support economic growth, the DEP said in its
latest macroeconomic projection.

2.2.2 External environment

The International Monetary Fund (IMF) has predicted that Bosnia's
current account gap will expand to 4.3% of GDP in 2022 from 2.1% in
2021. It is anticipated to contract to 3.7% of GDP in 2023.

The state Directorate for Economic Planning (DEP) expects that the
current account deficit will reach around 3.6% of GDP in 2023 from an
estimated 3.9% of GDP in 2022. In 2024-2025, the current account
deficit is set to fall to 2.9% and 3.1% of GDP respectively.

Bosnia’s current account deficit expanded by 97.6% year on year to
BAM1bn (€513.4mn) in the first six months of 2022, according to the
latest available central bank data.

The primary income account surplus contracted by 72% y/y to
BAM521.22mn in January-June. The surplus on the services account
decreased by 67.5% y/y to BAM1.99bn.

36 SE Outlook 2023 www.intellinews.com