The World Bank projects Bosnia and Herzegovina’s (BiH) economy to expand by 3.2 percent in 2018, despite the economy decline and estimation of 2.4 percent in the previous year, the official report said Wednesday.
Sandra Hlivnjak, an economist at the World Bank in BiH, presented the World Bank Regular Economic Report (RER) for the Western Balkans at the press conference held in the capital Sarajevo explaining how the implementation of the Reform Agenda in BiH could lead to a higher growth.
“We expect the program of implementation of the Reform Agenda to advance and that, thanks to the set of excise tax laws that have been adopted, investment projects will be activated that could lead to higher growth…,” Hlivnjak said.
She pointed out that a steady growth in the last three years is evident in BiH, but that there are problems of unemployment and account deficit.
“Unemployment is still a chronic problem of the BiH economy, something that this country must deal with. The current account deficit has somewhat increased in 2017,” Hlivnjak explained.
Despite the creation of 190,000 new jobs in the first nine months of 2017 at the territory of Western Balkans, namely in Albania, BiH, Kosovo, FYR Macedonia, Montenegro, and Serbia, there is an evidence of decline in growth, report says.
World Bank Regional Director for the Western Balkans Linda Van Gelder explains that this happened due to growth’s vulnerability to domestic and external shocks.
“The trend we are seeing in the region is positive, more and more people are finding jobs and wages are slowly rising upwards. However, growth is vulnerable to domestic and external shocks, as the slow-down in 2017 growth has confirmed, “Van Gelder explains.
She noted that the growth in BiH is forecast to rebound to 3.2 percent in 2018 with the right mix of policies and regulations to reduce vulnerability to shocks and support growth.
The World Bank reports that BiH increased investments in 2017, followed by the rise in employment, especially in wholesale and retail trade.
Emanuel Salinas, a Country Manager for BiH and Montenegro says that through the employment support program and help of the World Bank, there should be a creation of 30,000 new jobs in BiH.
The World Bank report calls for bold structural reforms needed in order to consolidate job creation and spur sustainable growth over the medium term.
In order for countries of Western Balkans, including BiH, to combat effects of weather-related shocks and country-specific vulnerabilities, the report urges country to introduce reforms to promote private sector development and reduce barriers to labor force participation.
Sarajevo Times
