Transcript Kemal Kozarić, Ph.D.

„Current Issues and Future Challenges
and Perspectives of Economy of
Bosnia and Herzegovina“
Kemal Kozarić, Ph.D.
Governor of the Central Bank of Bosnia and Herzegovina
Session 4: “The Impact of the Euro Crisis on the Financial Stability in Bosnia and Herzegovina and
the Region”
Workshop“The impact of Euro Crisis and Investment Opportunities in Bosnia and Herzegovina”
May 11th, 2012, St Antony’s College, University of Oxford
Bosnia and Herzegovina:
 Where are we now?
 Where do we want to be in the future?
 Potential risks along the way
 Chances and opportunities
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Bosnia and Herzegovina – Where are we now?
2010
2011
2012 (projection)
EUR 12.56 billion
EUR 13.27 billion
cca. EUR 13.70 billion
3.271 EUR
3.455 EUR
Real Growth Rate
0.7%
1.6%
1.5%
Industrial Production Growth Rate
1.6%
5.6%
5%
Average Inflation on Annual Level
2.1%
3.7%
3.0%
27.2%
27.6 %
28%
408 EUR
417 EUR
419 EUR
Foreign Debt
EUR 3.19 billion (25.2 % GDP)
EUR 3.39 billion (25.6 % GDP)
EUR 3.73 billion (27.2 % GDP)
Current Account Deficit
EUR 766 million (6.3% GDP)
EUR 1.14 billion (8.6% GDP)
EUR 766 million (GDP 4.1%)
52.1%
54.5%
55%
FDI (Estimate)
EUR 173.8 million
EUR 312.9 million
Foreign Reserves
EUR 3.301 billion
EUR 3.284 billion
Gross Domestic Product (GDP)
GDP Per Capita
BH Unemployment Rate
Average Salary on BH Level
Imports Coverage
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Where do we want to be in the future?
 Country wide consensus on joining the European Union and
Euro-Atlantic integrations
 European legacy and history
 Strong economic ties with the EU members
 Strong benefits from joining the large European family experienced by
other countries which recently accessed to it
 Stability and safety net provided by joint European institutions
 Our goal is to try to change the perception of our country abroad
and to improve level of information available on our country
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Potential risks along the way
External risks
Global economic downturn, especially
slowdown in our main trading partners
– impact on exporters and FDI
Risks of spillover in the banking
sector – 84% foreign owned
Changes in neighboring countries –
Croatia joining the EU and impact on
foreign trade (positive and negative)
Internal risks
Political stability – impact on
perception of potential investors and on
credit rating
Speed of implementation of
necessary structural reforms
Large expansion of public
expenditures in previous years
endangered fiscal sustainability
BH budget deficit needs to be
controlled
BH public debt needs to be
monitored
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Chances and opportunities
 There are realistic reasons for optimism, since Bosnia and
Herzegovina has:
1. Skilled and educated labor with reasonable wages;
2. Large unused potential of the energy sector – only over 30% of all
water resources are used up, significant potential in wind power;
3. Significant potential in the domain of organic food production;
4. Immense touristic potential;
5. Incomplete process of privatization in domains being attractive for
potential investors (pharmaceuticals, telecommunication, wood
industry, energy...)
6. Continuation of C5 corridor construction
 The most important precondition for future improvement is
political stability.
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Instead of conclusion...
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Thank you for your attention
http://www.cbbh.ba
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