IMF Staff Country Reports

The 2023 Article IV Consultation highlights that Russia’s war in Ukraine continues to place significant headwinds on the European economy, with implications for Bosnia and Herzegovina (BiH). With a further slowing of activity in Europe and declining commodity prices, growth is projected to decelerate to 2 percent in 2023 and inflation to 6 percent. Growth will remain low at 3 percent and inflation will only gradually return to 2 percent in outer years. Downside risks are high and include a possible abrupt slowdown in Europe, an intensification of domestic political tensions, and the materialization of financial risks. Strengthening public enterprise oversight and governance, improving the business environment, and digitalizing the economy are key to accelerating private sector led growth. An immediate priority is to adopt a new anti-money laundering law. Urgent reforms are also needed to enhance corruption prevention and enforcement efforts. Increased efforts are needed to prepare for the introduction of the EU’s Carbon Border Adjustment Mechanism and to transition away from coal to green energy.