International rating agency S&P Global Ratings has maintained Bosnia and Herzegovina’s credit rating at ‘B+’ with a stable outlook.
In a report on Bosnia and Herzegovina, S&P analysts state that the consolidated fiscal position of the general government in BiH continues to be a strength of the rating. Budget deficits are projected to average below one percent of GDP annually in the period 2025-2028, resulting in the stabilization of general government net debt at 21 percent of GDP by 2028. Slightly less than 60 percent of consolidated gross general government debt is owed to official bilateral and multilateral creditors with long maturities and favorable interest rates. Accordingly, analysts project that debt service costs in BiH will remain contained until 2028, averaging 2.6 percent of government revenues, which is low by global comparison.
Analysts further state that economic growth has slowed due to weak demand from BiH’s main trading partners in the EU, and a modest real growth of 2.5 percent is expected this year, before a slight recovery next year.
Current account deficits are expected to remain low over the next four years, averaging just above three percent of GDP. According to analysts, Bosnia and Herzegovina will maintain a currency board arrangement, which also represents an important political anchor for the local economy.
According to analysts, S&P could downgrade the credit rating if there is an escalation of political and institutional risks that could threaten the basic functioning of the state or weaken the government’s ability to service its debts. On the other hand, an increase in the credit rating may occur if consensus-based policymaking accelerates structural reforms, including those related to the country’s accession to the European Union, the CBBH Communications Office announced.
