The European Commission has cancelled two rural development projects in Bosnia because of the failure of local authorities to agree on the structures to channel EU agriculture and rural development assistance. An IMF mission launched on September 4 the fourth review of Bosnia’s EUR 390mn stand-by loan agreement and its successful completion would provide the country with a tranche of some EUR 50mn.

On the economic front, consumer prices in the country eased to 0.8% year on year in July from 1.0% the month before. The industrial output rose 6.9% year on year in the first seven months of 2013 thanks to higher manufacturing and electricity production.

The unemployment rate stagnated at 44.4% for the second straight month in June 2013 and was slightly lower than its end-2012 level of 44.5%.

The foreign trade gap narrowed 12.5% year on year to EUR 1.8bn in January-July 2013 on the back of rising electricity and manufacturing sales abroad. The share of non-performing loans in total loans rose to 14.3% in the second quarter of 2013 from 12.7% a year earlier and 13.8% at end-March.

Bosnia’s commercial banks assets went up 3.2% year on year to EUR 11.6bn at end-July, quickening from a 2.7% rise the month before. Domestic loans grew 2.5% year on year to EUR 8.2bn at end-July, easing from a 2.9% growth in June due to slower corporate lending. Commercial bank deposits increased 5.0% year on year to EUR 7bn accelerating from a 3.9% annual growth the month before due to stronger retail deposit collection.

The central bank gross foreign reserves rose 11.8% year on year to EUR 3.37bn at end-June, faster than the 9.8% rise recorded a month earlier.