Macroeconomic Forecast Bosnia

Despite the ongoing political ructions which will further delay fiscal reforms and dent investor sentiment, we still expect the Bosnian economy to remain in recovery mode through 2011. Following the estimated 0.4% expansion in real GDP in 2010, we forecast an acceleration in growth to 3.9% in 2011, with the upswing peaking in 2012 when we expect the economy to grow by 5.1%. There are, however, risks to our forecast which include the aforementioned political woes, as well as the potential for a painful surge in supply-side driven in inflation which could destroy demand.

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