S&P Global Ratings confirms the credit rating of Bosnia and Herzegovina

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

According to S&P analysts, public finance in the coming period will be affected by the growth of pre-election expenditures, primarily for pensions and wages in the public sector, which is why budget deficits are expected to increase at all levels to exceed 3% of GDP this year. Without additional fiscal consolidation measures, public debt could rise gradually, but it remains at a moderate level by international standards.

The Agency lowered its forecast for BH economic growth to just over 2% due to negative consequences of global trends, especially higher energy and transport costs, as well as weaker demand in important export markets in the European Union.

Nevertheless, domestic consumption remains stable, supported by growth of pensions, wages and social benefits that have increased disposable income of households.

S&P warns of challenges in industrial production, particularly in the energy and manufacturing sectors, as well as the possible consequences of the introduction of the European Carbon Border Adjustment Mechanism (CBAM), which could impact a part of BH exports.

Analysts expect Bosnia and Herzegovina's current account deficit in 2026 to be a moderate 3.8% of GDP, which is slightly higher than in 2025. The negative effects of weakening foreign demand for goods and higher prices of energy imports will be partly mitigated by growth of exports of services and a strong inflow of remittances from abroad.

The Agency also points out that the currency board implemented by the Central Bank of BH, which is based on the fixed exchange rate of the convertible mark and the euro, remains an important pillar of the country's economic policy.

Regarding European integration, S&P states that the lack of progress in reforms leads to a delay in the payment of funds from the Growth Plan for the Western Balkans. At the same time, implementing the necessary economic reforms could help Bosnia and Herzegovina improve economic growth and respond to key challenges.

The confirmation of the B+ rating, with a stable outlook, is an assessment of the country's current economic stability, while at the same time pointing out areas where further reforms are needed.