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SARAJEVO, April 11 (FENA) - According to the World Bank estimates, economic growth in Bosnia and Herzegovina this year will amount to 3.2 percentage points.
“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, but we can see that this effect will show from 2019," said Sandra Hlivnjak, economist at the World Bank in BiH.
The World Bank has presented its Western Balkans Regular Economic Report devoted to recent economic developments in Albania, Bosnia and Herzegovina, Montenegro, Kosovo, Macedonia and Serbia under the title "Vulnerabilities Slow Growth".
Talking about issues of particular importance to Bosnia and Herzegovina, Ms. Hlivnjak said that with an estimated economic growth of 3.2 percent in 2017, BiH has maintained steady growth over the last three years.
“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. According to some of the first preliminary estimates we have made, we did not have a fiscal deficit in that year. Therefore, the fiscal and financial stability should continue to be a priority,” Ms. Hlivnjak added.
She stressed that there was potential for economic growth, but only if the reform processes continue.
Linda Van Gelder, the Country Director of the World Bank for the Western Balkans Region, gave a brief analysis of the recent economic trends in the region via a video link from Vienna.
She said that growth in Western Balkan countries (Albania, Bosnia and Herzegovina, Montenegro, Kosovo, Macedonia and Serbia) had decreased in 2017 despite the creation of 190,000 new jobs in the first nine months of that year.
The GDP growth declined in the region from 3.1 percent in 2016 to an estimated 2.4 percent in 2017, following harsh winter and lower investment inflows. Growth is expected to recover to 3.2 percent in this and to 3.5 percent in the coming year.
“The trend we notice in the region is positive, increasingly more people find work, and salaries are slowly growing. However, growth is vulnerable to domestic and external shocks, which is confirmed by the slowdown in growth in 2017. The stronger growth we forecast for following years will depend on adopting an appropriate set of policies and regulations to reduce shock sensitivity and boost growth," Ms. Gelder said.
To increase job creation and sustainable growth over the medium term, the report cites the need for decisive structural reforms.
The World Bank Country Manager for BiH Emanuel Salinas said that the employment support program, whose implementation has recently begun in BiH with the help of the World Bank, should ultimately result in some 30,000 new jobs.
"From the standpoint of the World Bank, we see the opening of more jobs as the biggest challenge a country needs to deal with," Mr. Salinas said, adding that it requires reviving the private sector and creation of more jobs in that sector.
According to him, it is also necessary to facilitate work for the private sector in BiH and have such an education system that will provide people with the skills and knowledge needed by the country's economy.
Mr. Salinas said the World Bank was ready to help BiH do all this.
(FENA)
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