Gradual Strengthening of Economic Growth in B&H expected

Economic Growth in B&H neznase.baAn upward trend of gradual strengthening of economic growth is predicted in B&H at a rate of 2.6 percent this year and 3.2 percent next year, stated the Directorate for Economic Planning of B&H in the report on the changes in macroeconomic indicators.

Gradual improvement of the external environment is expected to continue in the reporting period, where the expected strengthening of economic growth and employment in the environment should provide a significant growth not only of export but also of domestic demand, which is to a large extent financed by foreign inflows.

Economic strengthening of Euro zone is expected at the rate of 1.3 percent in this and 1.9 percent in the next year.

Besides the gradual improvement of the external environment, the projections of economic growth of B&H for this and next year imply the absence of natural disasters and normal hydrological situation in hydro power plants, as well as the usual level of overhauls in the electric power system.

In this year, the expected stabilization of world prices should stop the deflation that has posed a serious threat to the economic growth of B&H in the past, and the return of inflation is expected in the coming years.

The gradual normalization of the situation and restoring the economy on an upward trend in B&H suggests that this growth should be stimulated primarily by domestic demand, with a modest negative contribution of the foreign trade deficit.

The expected gradual increase in the number of employed and real wages made possible with the growth in production and export, as well as with liquid inflows from abroad and direct foreign investments, should lead to an increase in the final consumption by 1.7 percent and investments by 8.3 percent this year.

A similar growth in demand is expected in the next year as well, when the final consumption should increase by the real rate of 1.8 percent and investments by 7.4 percent.

At the same time, a significant real growth in export by 6.8 percent is expected this year, followed by a slowdown at the rate of 6 percent in the coming year.


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