Governor's statement for Večernji list: Real Economic Activity Growth of 14.7 Percent

The Central Bank of Bosnia and Herzegovina (CBBH) estimates the annual growth of real economic activity in the second quarter of 2021 at 14.7%. The projection was made on the basis of available official data for the first six months, published by the end of August. Governor of the Central Bank Senad Softić said for Večernji list that their fast estimates of a change of real economic activity in the second quarter (14.7%) and the first half of this year (8%) are quite harmonized with the published Eurostat estimates for the EU countries. In the second quarter, the annual real GDP growth of 13.2% was published for EU. The high rate of harmonization with the trends in the EU is expected taking into account the significance of foreign demand for economic activity in BH. The impulse of stronger than initially expected growth of foreign trade volume is continued in the third quarter as well. Assuming satisfactory epidemiological situation in the last quarter, we even now expect that the projections of real GDP growth in BH for 2021, in autumn round, would be revised upwards from the current level of 3.4%, he stressed. Inflationary pressures in BH have been increasing significantly from May, the CBBH expecting the trend to be continued until the end of the year. According to fast projections, which we have just published, the 2021 inflation is expected to be 1.2%. Although such percentage seems to be moderate taking into account current price shocks, we should take into account that since June only, we have been recording inflation for the period, at the annual level, resulting from the trends of food prices in global markets, climate changes, potential oil shocks and significantly higher prices of maritime trade of goods. Therefore, realistic projections of growth of average consumer prices are 2% in the third, i.e. 2.6% in the fourth quarter of this year at the annual level, Softić concluded.