The €6 billion EU Growth Plan aims to accelerate the socioeconomic development and EU integration of the Western Balkans through investments in key areas like clean energy and digitalization. Tailored strategies are necessary to address unique economic challenges and leverage global shifts, enhancing regional economic prospects. The region’s potential for nearshoring further boosts growth opportunities. However, progress depends on resolving bilateral disputes and implementing essential reforms, particularly in governance and rule of law. |
The Q2 GDP release reveals a weakened momentum followed by a downward revision of Q1 by 20bp. GDP growth in Q2 landed at 2.2% yoy in real terms, even though high-frequency indicators on the consumption and lending side gave a sense of better performance in Q2, apart from the troubled industrial side and exports. |
Thanks to the moderate level of key headline inflation segments, (Food, Transport and Housing) which were driving inflationary peaks in previous years, B&H has now taken the first place in the WB region in CPI deceleration trend with an average of 1.9% yoy in Jan-Aug 2024. |
Different trends in high-frequency economic indicators did not affect the B&H banking sector performance, as the sector reported a new record being on track in the context of net profit, loan portfolio and dynamics of deposits, whilst showing a record low NPL level in H1 2024. |
After economic deceleration in 2023, when the B&H economy posted below-average GDP growth at +1.8% yoy, a positive sign is coming in Q1 2024, when it grew by +2.7% yoy, primarily thanks to a higher level of gross capital formation (+49.8% yoy) and private consumption (+2.7% yoy). |