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Bosnia and Herzegovina: 2025 Article IV Consultation-Press Release; Staff Report; Staff Supplement; and Statement by the Alternate Executive Director for Bosnia and Herzegovina

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  • International Monetary Fund

Abstract

The 2025 Article IV Consultation discusses that growth has remained resilient despite a challenging environment and is projected at 2.4 percent in 2025 in Bosnia and Herzegovina. Downside risks are elevated, including trade tensions, weaker external demand, heightened domestic political tensions and policy slippages ahead of the 2026 elections. The external position is expected to remain broadly unchanged in 2025, while credit growth is projected to moderate somewhat. The outlook is subject to downside risks. Strong growth in real wages and private sector credit could put upward pressure on inflation. Fiscal policy should focus on medium-term consolidation, rebuilding buffers, and improving the quality of public spending, supported by a strong structural reform agenda. Safeguarding central bank independence, strengthening its policy toolkit, enhancing macroprudential oversight, and closely monitoring financial sector risks are essential to preserving the currency board arrangement and ensuring financial stability.

Suggested Citation

  • International Monetary Fund, 2025. "Bosnia and Herzegovina: 2025 Article IV Consultation-Press Release; Staff Report; Staff Supplement; and Statement by the Alternate Executive Director for Bosnia and Herzegovina," IMF Staff Country Reports 2025/252, International Monetary Fund.
    • Handle: RePEc:imf:imfscr:2025/252
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