News in English     | 03.12.2020. 16:56 |

Record decline of GDP in BiH in 2020, prospects good for 2021

FENA Press release

SARAJEVO, December 3 (FENA) - The economy of Bosnia and Herzegovina will be impacted by a deep recession in 2020 as a result of the Covid-19 crisis, and the forecast of -5.2 percent of real GDP decline in the current year remains unchanged. After a record fall in GDP in the second quarter of -9.2 percent and the expected weak recovery of the domestic economy in the third quarter, an additional challenge in the fourth quarter will be a new tightening of measures to prevent the spread of Covid-19 in BiH and the introduction of the so-called "light lock-downs" in European countries - stated the Research and Consulting Department of Raiffeisen Bank in BiH.

The new measures are particularly challenging for the service sector, with the tourism sector being the hardest hit, with key indicators falling by more than 60 percent in the first nine months, and such a decline is expected by the end of the year. In the same period, the transport sector in BiH also suffered a decline of more than 30 percent, taking into account all subsegments of freight and passenger transport.

Industrial production, which recorded its first recession year in 2019, in the first nine months of 2020 had a decline of 8.2 percent compared to the previous year, and by the end of the year is expected the deepest decline in industrial production of seven percent compared to the same period last year. Also, the decline in retail sales is expected to ease from 8.1 percent in the first three quarters of 2020 to 6.5 percent by the end of the year.

“In addition to the measures that most affect the service sector, this decline in private consumption was also influenced by a significant increase in unemployment in our country. From the beginning of the Covid-19 crisis until September 2020, 30 thousand people lost their jobs, which is in line with expectations, and in terms of rising unemployment, we can say that the worst is behind us. In 2020, we expect the unemployment rate to reach a level of 17.5 percent,” say analysts at Raiffeisen Bank.

The current crisis has led to an extremely large decline in both domestic and foreign demand and thus affected the unprecedented decline and loss of revenues from exports of goods and services and the decline of two drivers of BiH economic growth - private consumption and retail revenue.

Positive prospects for the development of a vaccine to prevent the spread of Covid-19, lead to the expectation that in the second half of 2021 there will be a significant recovery of the European and BiH economy, as a result of which the economic growth forecast was revised to 3.5 percent. In the coming year, support to the private sector is extremely important within the second wave of support from the entity governments to the most affected sectors of the economy. BiH has entered this crisis with a very good fiscal profile and it is necessary to use targeted and efficient new available creditors' funds to start the private sector and investments. It is necessary to do everything to start the private sector and restore confidence in the economic recovery in the coming year, said Raiffeisen Bank in BiH.

(FENA) L. N.

Vezane vijesti


Warning: Invalid argument supplied for foreach() in /var/www/vhosts/fena.ba/httpdocs/post-new.php on line 379

Promo

M:tel: Savršena kombinacija – Huawei telefon i pametni sat s popustom

M:tel: Stiglo nam je Proljeće!

Predstava 'Kako sam se nadala dobro se nisam udala' u BKC Sarajevo