Interview of Governor Senad Softić to the newspaper "Dnevni Avaz" - A difficult year awaits us 12/11/2020 Tweet Governor of the Central Bank of BH Senad Softić for "Avaz" We will reach the pre-pandemic economic level only in two years We expect a drop in personal consumption this year, says Softić In the next two years, the growth of the real gross domestic product in BH is not expected to exceed 3 percent, and stagnation will be felt in all sectors of society and economy, Governor of the Central Bank of BH (CBBH) Senad Softić told to Avaz. Significant decline He added that the CBBH expects a significant decline in economic activities this year. -With such moderate growth rates, reaching the pre-crisis level of economic activity is expected in 2022, at the earliest. The previous projection of a stronger recovery in 2021 was postponed to the end of the projection period, primarily due to the intensity of the second wave of the pandemic, but also weaker than expected effect of government spending on economic activity in the country in 2020, said Softić. According to him, in the current year, it is expected that only the growth of government spending will somewhat mitigate the decline in overall economic activity, while all other components of gross domestic product will record a significant decline. -Due to unfavorable trends in the labor market, falling remittances from abroad, reduced lending activity and reduced consumer optimism, a strong decline in personal consumption is expected this year. Only in the case of this aggregate consumption component, a return to the pre-crisis level is not expected by the end of 2022, said Softić. He points out that in 2021 and 2022, the importance of investments in the generation of gross domestic product is expected to grow, under the assumption of maintaining the continuity of public investments. -In line with the trends in the real economy, a milder strengthening of inflationary pressures is expected only from next year. However, the current projections for 2021 and 2022 may be subject to stronger revisions if the epidemiological situation does not improve by the end of the first half of next year and if the negative effects on economic activity in major trading partners are significantly worse than our projections, stressed Softić. He pointed out that the projections can be adjusted even higher if the epidemiological situation, due to the invention of the vaccine, significantly improves in the country and the world. Faster recovery -If the recovery would take place in the first half of next year, it would result in a faster recovery of tourism and related activities. Also, the projections can be adjusted upwards if public investments are intensified and some of the long-announced structural reforms are implemented - said Softić. Moderate optimism According to Softić, there is still room for moderate optimism. -I remind you, the first estimates spoke of a decline in gross domestic product between 6 and 6.5 percent. However, now, before the end of the year, we can talk about a reduction of 4.6 percent, which is significantly less than the first estimates, said Softić.
