S&P has maintained the credit rating of BH

S&P Global Ratings has maintained Bosnia and Herzegovina's credit rating at 'B+' with a stable outlook.

In the report for Bosnia and Herzegovina, the S&P analysts state that the consolidated fiscal position of the general government in BH remains a rating strength. Budget deficits are projected to be on the average below 1% of GDP per year over the period 2025-2028, resulting in the stabilisation of the net debt of the general government at 21% of GDP by 2028. Just under 60% of the consolidated gross debt of the general government is related to official bilateral and multilateral creditors with long maturities and favourable interest rates. So, the analysts predict that the debt servicing costs in BH will remain limited until 2028, at the average of 2.6% of the government revenues, which is low by global comparison.

The analysts further state that the economic growth has slowed down due to weak demand of BH main trading partners in the EU, so modest real growth of 2.5% is expected this year, before a slight recovery next year.

Current account deficits are expected to remain low in the next four years, slightly higher than 3% of GDP on the average. According to the analysts, Bosnia and Herzegovina will maintain the currency board arrangement, which also represents an important political anchor for the local economy.

According to the analysts, S&P could lower the credit rating if there is an escalation of political and institutional risks that could jeopardise the basic functioning of the country or weaken the government's ability to service its debts. On the other hand, the credit rating could rise if consensus based adoption of policies accelerates structural reforms, including those related to the country’s accession to the European Union.