The International Monetary Fund (IMF) projected that BiH’s economic growth of 2.4 percent in 2022 will slow down to two percent in 2023, while inflation in BiH, according to the IMF’s assessment in 2022, amounts to 10.5 percent.
The Central Bank of BiH today presented the report of the International Monetary Fund entitled “Regional Economic Perspectives for Europe”. Gabriel Di Bella from the European Department of the IMF and the resident representative of the IMF in BiH Andrew Jewell spoke about the latest developments, predictions and risks for future prospects in Europe and BiH.
The Governor of the Central Bank of Bosnia and Herzegovina, Senad Softić, in his opening address, emphasized the good cooperation with the IMF and the readiness to participate in all joint efforts to find better prospects for the future of our economy.
“We are aware that we live in a time of great uncertainty and that the whole of Europe is facing the same challenges, from the war in Ukraine, the energy crisis to high inflation. We all have the same or similar problems, and therefore a strong coordinated action is necessary,” emphasized Softić.
Gabriel Di Bella from the European Department of the IMF said that the war in Ukraine is creating several challenges for the region, among them is increased inflation that has resulted in a coordinated response from central banks around the world.
The decreased supply of gas from Russia, he added, has a direct impact when it comes to the production functions of many companies, but also an indirect impact when it comes to electricity production and an increase in prices, not only of gas but also of electricity.
“The consequence of higher food and energy prices is that there has been increased inflation in the region, regardless of whether we are talking about developing economies or advanced economies. Between 60 and 70 percent of the increase in inflation that we saw in August this year is due to the joint combination of higher food and energy prices,” stated Di Bella.
The resident representative of the International Monetary Fund (IMF) in Bosnia and Herzegovina, Andrew Jewell, spoke about the prospects and perspectives for economic growth in Bosnia and Herzegovina.
“The recession during the pandemic was not as bad as we feared, and then we had a recovery that was stronger than we expected. Now, as the outlook in Europe worsens, we have successively made corrections. According to our last published forecast, we predicted 2.4 percent growth in 2022, and two percent growth in 2023,” Jewell said, adding that inflation in BiH, according to the latest estimates, will be at 10.5 percent in 2022.
Behind the high inflation, he added, there are mainly two categories, food, which makes up one-third of the consumer price index, as well as transport prices.
When it comes to energy supply, many countries in Western Europe are exposed to further reductions in gas supply, Jewell said, adding that Bosnia and Herzegovina is less sensitive to energy trends than some other countries.
According to the trends on the world market, the prices of gas and gasoline are higher, while, as he pointed out, the prices of electricity have been frozen for a long time for households, while the increases in electricity prices for companies have been limited.
