Peter Nicholl at the Second Business Roundtable With the Governments of BH

The Governor of the Central Bank of Bosnia and Herzegovina Peter Nicholl expects inflation in BH to be remain stable at around current levels, economic growth rates to be at least six or seven percent per annum and the balance of payments situation to be gradually improve. But these positive economic forecasts are dependent on the new economic reform process in BH accelerating.

Although the environment for private investment has improved, there are still risks attached to investing in BH, said Governor Nicholl during the Second Business Roundtable with the Governments of Bosnia and Herzegovina that was organized by the "Economist Conferences" on September 22 and 23, 2003 in Sarajevo. But he now believes that opportunities exceed the risks.

Mr. Nicholl stressed it is difficult to predict the economic outlook in BH with precision because BH is going through so many transitions simultaneously and because of the fact that the economic outlook depends on an acceleration of the economic and legal reforms in BH.

"Unless the legal and tax systems are changed, quickly and substantially, BH will have a very difficult future", the Governor of the CBBH warned at the conference, but added he is an optimist and believes that we will see a combination of continued macro-economic stability and acceleration of reforms are following.

In his speech, the Governor talked about the CBBH and its role in the maintenance of financial stability, improvements in banking sector and especially on the changes in financial sector in the near future.

As BH has a sound Central Bank and a stable currency as well as rapidly improving commercial banking sector, the challenges for the next two years will be to maintain financial stability and to develop the capital and securities markets.

Among the initiatives that are proposed or underway are the establishment and work of the National Capital Market Council, making of the first sovereign credit rating, the establishment of the securities market, moving the banking supervision under the umbrella of the CBBH, harmonization with the standards and regulations of the European Union in all areas in financial markets and the possible establishment of a regional stock exchange.