This report covers the main macroeconomic releases from September 5 until October 6, 2014 as well as the financial and political events that took place in Bosnia during this period.
Ratings agency S&P has affirmed its credit rating on Bosnia at B/B, confirming the stable outlook. The report provides the agency’s GDP growth projection for Bosnia as well some other rating highlights.
The country’s bigger entity, the Federation, said its GDP recorded a 0.6% annual drop in the second quarter of 2014, reversing from a revised 2.8% annual hike in the previous quarter.
In this period, most international organisations revised down their GDP growth forecasts for Bosnia, saying the economy will not expand by more than 1.0% in 2014 due to the mid-May floods.
The report also includes detailed information about the upcoming elections in the country, which will take place on October 12.
On the corporative front, Hungarian low-cost airliner Wizz Air plans to expand its operation in the country, opening a base at the Tuzla Airport, as well as to launch three flights by the summer of 2015 from the Sarajevo airport. In addition, German dairy producer Meggle also want to expand in Bosnia and revealed plans to invest in building a logistics distribution centre and a second plant.
The report also contains information about the signed agreement between four Balkan countries to gradually work on cutting roaming prices in order to reduce them to the level of EU tariffs within three years.

Key points:
• CPI remained on a downward trend for a 13th consecutive month in August, dropping 0.6% y/y as food prices continued to drop.
• The working-day adjusted industrial production contracted 4.5% y/y in August, reversing from the 4.0% annual growth in July as the overall output shrank by 5.7% in the month.
• The current account deficit widened 38% y/y in the first half of 2014, mainly on the back of higher foreign trade gap and lower services income from abroad. The country’s net international investment position (NIIP) narrowed 5.6% to minus BAM 14.96bn (EUR 7.65bn) in 2013, according to latest available figures, as external assets increased at a faster rate than external liabilities.