The global economic and financial crisis found the economy of Bosnia and Herzegovina in a vulnerable position. The government put together a comprehensive program supported by the International Monetary Fund. The stabilization program has helped mitigate the impact of the global financial crisis...

Threats to external stability in the pre-crisis period have now been reduced substantially and foreign non-debt creating flows have declined, sufficient to support external stability. The global economic downturn has raised challenges for evaluating the countries’ fiscal stance and fiscal...

The staff report for Bosnia and Herzegovina’s (BiH) first review under the Stand-By Arrangement is presented. The precipitous drop in demand for BiH’s exports and the drying up of foreign direct investment triggered a sharp decline in private investment. Tightening credit conditions and the...

This Selected Issues paper for Bosnia and Herzegovina (BiH) reports that GDP per capita in BiH is similar to that in neighboring Balkan countries. BiH risks are falling behind rather than catching up with other transition economies in terms of its economic development. This could delay the...

This Article 2008 IV Consultation highlights that Bosnia and Herzegovina’s economy has been exhibiting robust growth, but imbalances have emerged. The current account deficit has widened and underlying inflation has picked up. Procyclical fiscal policy has added to these imbalances. Moreover,...

This Selected Issues paper examines the risks and structural weaknesses in Bosnia and Herzegovina. The paper provides an estimate of the current account adjustment required to stabilize net foreign liabilities. It uses the external sustainability approach of the Consultative Group on Exchange...

This 2007 Article IV Consultation highlights that the economy of Bosnia and Herzegovina is enjoying its fourth consecutive year of stable growth underpinned by the currency board. Export growth of 29 percent on the back of productivity gains, export price increases, and improvements in reporting...

Economic growth in Bosnia and Herzegovina (BiH) has been impressive with GDP. The dominance of foreign-owned bank subsidiaries has transformed the financial sector and altered the risks to financial stability. Reforms should focus on strengthening banking supervision and adapting it to the...

This paper discusses the request from the Bosnia and Herzegovina authorities for a Stand-By Arrangement. The global financial and economic crisis hit Bosnia and Herzegovina when the overheating was already raising doubts about the sustainability of the economic expansion. The authorities’...

Activity and fiscal policy continue to exceed expectations, but strong bank credit growth has fuelled a sharp increase in the current account deficit. In this context, the new administrations recognize the need to establish the macroeconomic stability quickly. These actions are supported by...