After two quarters of this year, Bosnia and Herzegovina achieved a total volume of foreign exchange of 22.5 billion BAM, which is 1.33 percent less compared to the same period last year. Exports are in decline. On the other hand, imports are growing. This is why our country recorded the largest half-yearly foreign trade deficit ever, 6.1 billion BAM.
Imports had the opposite tendency to exports and continued to grow. It was increased by three percent, i.e. by 307 million marks. After the last two quarters of last year, the decline in exports continued this year as well.
“Exports in the reference period amount to 8.2 billion BAM, which is again a decrease of 8.18 percent compared to the reference period last year. Or expressed in numbers, some 729 million marks,” points out Slaviša Ćeranić from the Macroeconomic System Sector at STK BiH.
The decline in exports was inevitable due to our high dependence on the European Union market, to which we export more than 70 percent of our goods, and where there was a decrease in economic activity. This is the key, but not the only, reason for the decline in exports.
“It’s not all about the drop in demand in the West. It’s the biggest culprit of everything that’s happening. But if you have a good product and if you have a good management structure or sales strategy, you can also look for other markets. We see that in certain markets certain goods they have much higher prices than what we sell to our Western partners,” says economic analyst Aleksandar Ljuboja.
Many export sectors are in decline, but the largest for half a year, in the amount of 262 million marks, was recorded in the processing sector, which was inevitably reflected in the decline in the number of employees.
“In the past period, we lost somewhere around 2,600 jobs in the processing industry. Dominantly. Plus agriculture. So we can say that for now this is one of the negative effects that can potentially extend to the whole year”, says Saša Acić, director of the Union employers of the RS.
The foreign trade deficit continues to grow and threatens to be larger than last year’s record of 11 billion marks. By the end of this year, if it continues at this pace, it could amount to 12 billion, which means that every month of the year, our exports are less than imports by one billion marks.
“According to existing trends, this deficit will probably be relatively larger compared to previous years. This is primarily due to the decline in export activity. It is to be hoped that this will not have a significant impact on the business of our exporters, that is, consequently, automatically on the rest of the BH economy,” emphasizes Admir Čavalic (Committee for Economic and Financial Policy PD PFBiH).
It is difficult to predict what will happen by the end of the year. However, the projected GDP growth, curbing inflation to an acceptable level and stopping the growth of interest rates are some of the positive signals that there could still be an increase in economic activity in the second part of the year, BHRT writes.
