Transcript Basic indicators of BH economy

MACROECONOMIC INDICATORS IN
BH AND BANKING SECTOR IN BH
KEMAL KOZARIĆ,
CENTRAL BANK OF BOSNIA AND HERZEGOVINA
Sarajevo, January 25, 2005
Contents
Basic indicators of BH economy
Banking system in BH:
Commercial banking sector in BH
Central bank of BH (CBBH)
2
Basic indicators of BH economy
According to the official data, GDP of BH in 2003 was KM
12,170 billion. If the effects of the informal sector included,
according to the CBBH estimations, GDP was KM 16,770 billion.
For the period 1999-2003, average estimated rate of real
GDP growth was 5, 4%, which can be considered as favorable
rate, given the structural changes which BH is passing
currently
The growth over the short-termed period is estimated to be
5, 5%.
3
Basic indicators of BH economy:
GDP
Real GDP
(annual change in %)
Real GDP growth
projection
18
16
6%
15,7
5,5%
5,5%
5,5%
5,5%
2004
2005
2006
2007
Change in %
14
12
4%
9,8
10
3,5%
8
5,5
6
4,4
5,5
3,5
4
2%
2
0
0%
1998
1999
(Source: CBBH)
2000
2001
2002
2003
2003
(Soource: PRSP)
4
Basic indicators of BH economy:
Real GDP - Comparison in the region
(annual change in %)
7%
5%
Change in %
3%
1%
-1%
2000
2001
2002
2003
-3%
-5%
-7%
BH
Czech Republic
Macedonia
Serbia and Montenegro
(Source: Transition Report Update, EBRD, March 2004.)
Bulgaria
Croatia
Slovenia
5
Basic indicators of BH economy:
Inflation
Inflation is stable and low. In November 2004, it amounted
0, 6%, representing one of the lowest inflation rate in the
region.
Stability and inflation level are result of successful running of
the CBBH’s monetary policy according to the principles of the
Currency Board Arrangement, meaning fixed KM exchange rate
pegged to euro.
6
Basic indicators of BH economy:
Inflation
Inflation in BH
Comparison with the
inflation in the region
6%
12%
5%
10%
8%
4%
6%
3%
4%
2%
2%
1%
0%
0%
2000
2001
2002
Inflation in BH
(Source: CBBH)
2003
Nov. 2004.
2000
BH
Croatia
2001
Czech Republic
2002
Slovenia
2003
Bulgaria
Macedonia
(Source: Transition Report Update, EBRD, March 2004, IMF Country
Report No: 04/67 March 2004)
7
Basic indicators of BH economy:
Unemployment
According to the official data, unemployment rate in BH was
the largest in the region and in October 2004 was 43%. However,
these data should be considered with caution having in mind the
estimated volume of grey economy and method of recording of
unemployed, so the estimate of real unemployment rate in 2003
was 19, 6%.
30,0%
22,9%
21,1%
20,0%
19,6%
10,0%
0,0%
2001
2002
2003
(Source: CBBH – data on unemployment with grey economy included)
8
Basic indicators of BH economy:
Imports coverage with exports
Imports coverage with exports in December 2004, totaled to
32%.
According to indicators of the total economic activities with
abroad, BH still records high foreign trade deficit, which, for the
first 11 months of 2004 totalled to KM 6, 93 billion.
9
Basic indicators of BH economy:
Foreign debt and fiscal policy
Servicing of the foreign debt is carried out successfully. At the end of
the third quarter of 2004, foreign debt balance was KM 4, 1 billion. Total
amount of the foreign debt in the observed period is by 1, 4% higher
compared to the end of 2003.
During 2004, it was continued the implementation of the accountable
fiscal policy, directed to stabilization of macroeconomic situation in BH.
The Agency for Indirect Taxation has been established at the state
level and activities are directed towards the delivery of legal regulations
for VAT introduction.
During 2003, the fiscal balance surplus was performed for the first
time and over the first six months of 2004 it amounted to KM 149
million.
10
Basic indicators of BH economy:
Fiscal balance
Fiscal balance (deficit and
surplus)
2
0,2
0
9%
4,6%
-2
4%
-8
0,0%
2000
2001
2002
2003
ve
ni
a
ac
ed
on
i ja
1999
M
1998
Sl
o
-10
ia
-1%
Al
ba
ni
a
-0,2%
ia
-4,6
at
-5,6
5,6%
2,5%
Cr
o
-5,8
1,6%
M
-5,2
1,4%
Bu
lg
ar
-6
-3,6
S&
-4
BH
(In GDP %)
Fiscal deficit in countries of
the region (2003)
(Source: Transition Report Update, EBRD, March 2004)
11
Basic indicators of BH economy:
Foreign investments
Foreign direct investment for nine months of 2004 amounted
to KM 532 million, while total foreign investments amounted to
KM 943 million.
Most of investments were in banking 35, 1%, manufacturing
31% and trade 11, 3% of total foreign direct investment.
Most of investments were from Austria in amount of KM 269
million, followed by Croatia with KM 79 million and Slovenia
with KM 34 million. These three countries account for 72% of
all direct foreign investment.
The largest recorded inflow of investments was during the
12
second quarter.
Basic indicators of BH economy:
Foreign investments
400
350
In KM million
300
250
200
150
100
50
0
Jan-Mar '04
Apr-Jun '04
Direct
Jul-Sep '04
Total
(Source: CBBH)
13
Indicators of BH economy:
Foreign reserves
CBBH foreign reserves have recorded constant growth. At the end
of 2003 they amounted to KM 2, 781 billion. According to the CBBH
data, as of November 1, 2004, the CBBH foreign reserves amounted
to KM 3, 341 billion.
In KM million
4.000,00
6
3.500,00
5
4
2.500,00
2.000,00
3
1.500,00
2
1.000,00
1
500,00
0,00
0
2000
Gross reserves
(Source: CBBH)
In months
Gross reserves
3.000,00
2001
2002
2003
2004 nov.
Imports value per months
14
Banking sector:
Accelerated development
Return of confidence
Savings growth
Higher level of banking services
Real competition
High level of foreign investments
15
Banking sector:
Changes
Payment systems reform
Significant increase in minimum of the banking
capital
Network of banks in entire BH
Deposit insurance
State-owned banks privatization
16
Banking sector:
Capital structure
31.12.2000
31.12.2002
1.01.2005
55
40
33
Private-owned banks
36
34
27
State-owned banks
19
6
6
47
10
16**
24
20**
67
64**
Total number of banks
Ownership:
Capital structure (in %):
State capital:
Local private capital
Foreign private capital
* Breakup not available.
** Data from September 31, 2004.
53*
Banking sector:
Credits
31.12.2000
31.12.2001
31.12.2002
31.12.2003
30.11.2004
Amount
Share
Amount
Share
Amount
Share
Amount
Share
Amount
Share
1652
100%
2101
100%
3213
100%
5122
100%
5792
100%
PRIVATE COMPANIES
833
50%
988
47%
1304
41%
1860
36%
2376
41%
PUBLIC
ENTERPRISES
322
20%
350
16%
361
11%
1167
23%
706
12%
CITIZENS
375
23%
647
31%
1415
44%
1966
38%
2587
45%
OTHER SECTORS
122
7%
116
6%
133
4%
129
3%
123
2%
TOTAL CREDITS
(end of period – in KM million)
Banking sector:
Deposits of companies and citizens
31.12.2000
31.12.2001
31.12.2002
31.12.2003
30.11.2004
Amount
Share
Amount
Share
Amount
Share
Amount
Share
Amount
Share
2094
100%
3324
100%
4158
100%
4366
100%
5502
100%
KM DEPOSITS
895
43%
1214
36%
1749
42%
2274
52%
2852
52%
FOREIGN
CURRENCIES
DEPOSITS
1199
57%
2110
63%
2409
58%
2092
48%
2650
48%
TOTAL DEPOSITS
OUT OF THAT:
(end of period – in KM million)
Banking sector:
Interest rates
Date
Private companies
Households
Rates on short-termed loans Rates on long-termed loans
Rates on “a-vista”
deposits
Long term savings
Dec. 2002.
12,07%
10,59%
1,44%
4,38%
Dec. 2003.
10,54%
9,18%
0,96%
3,40%
Nov. 2004.
10,31%
9,15%
0,79%
3,78%
CBBH:
Achieved results
For seven years of operations, the CBBH achieved its main task,
which is maintaining of monetary and financial stability in the country,
including the price stability. This is achieved by consistent
implementation of monetary policy through Currency Board
Arrangement.
KM has become the stable currency against euro and has the full
confidence of citizens. The full convertibility in BH and wider has been
achieved and each KM in the circulation has the full coverage in
convertible foreign currency.
Limitations of the Currency Board Arrangement: the CBBH cannot
credit the government, cannot act as the lender of last resort, cannot
directly fund the economic development, and the exchange rate cannot
be used as the instrument adjustment of economic shocks or bad 21
economic behavior.
CBBH:
Present and planned activities
The CBBH has established the Single Registry of Transaction
Accounts
Preparations for transfer of the supervision over the
commercial banks’ operations in BH under the umbrella of the
CBBH is underway.
The CBBH is actively participating in the development of the
Capital Market in the country and in preparations for the
European integrations.
22
CBBH:
Foreign reserves
MONETARY
LIABILITIES
DATE
FOREIGN ASSETS
DEC. 1997.
144,1
160,3
- 16,2
DEC. 1998.
283,3
253,9
29,4
DEC. 1999.
865,7
836,7
29,0
DEC. 2000.
1021,2
973,2
48,0
DEC. 2001.
2666,6
2591,6
75,0
DEC. 2002.
2463,2
2345,1
118,1
DEC. 2003.
2.779,6
2.626,3
153,3
NOV. 2004.
3.341,5
3.168,2
172,3
(end of period – in KM million)
FREE RESERVES