IMF cuts Bosnia growth forecast to 2.8pc in 2019, 2.6pc next year

• The reason for the slowdown is a weakness in the European Union as well as the protracted political stalemate here.
• Bosnia's main exports are to the EU market and have been harmed by trade uncertainty in the 28-member bloc.
• Jewell said an IMF mission would on Tuesday start a two-week visit to Bosnia to talk to the country's multiple governments.

SARAJEVO: The International Monetary Fund has cut its forecast for Bosnian economic growth this year to 2.8% from 3.1% previously, and to 2.6% from 3.2% in 2020, the IMF Resident Representative in Bosnia said in an interview on Monday.

"The reason for the slowdown is a weakness in the European Union as well as the protracted political stalemate here, which is preventing reform implementation," Andrew Jewell told Reuters.

Bosnia has been unable to form a new government at the national level and in one of its two autonomous regions more than a year after an October 2018 election due to political bickering among its rival ethnic leaders.

"It's not a major revision, we are still close to around 3%, and if we had new governments in place and strong commitment to reforms we could easily see our projections revised back up again, of course depending on what's happening externally as well," Jewell said.

Bosnia's main exports are to the EU market and have been harmed by trade uncertainty in the 28-member bloc.

In 2016, the IMF approved a three-year 553-million-euro ($616.48 million) aid programme for Bosnia, which had been repeatedly frozen over the authorities' failure to pursue agreed reforms. The loan was extended for one year and will officially expire in September 2020.

Jewell said an IMF mission would on Tuesday start a two-week visit to Bosnia to talk to the country's multiple governments, which have stated they wanted a new programme with the lender.

"We need to hear from them what reforms they want," he said.

Among reforms that will be discussed is restructuring or privatisation of state-owned loss-making companies, which account for about a fifth of the economy, and reform of indebted health sector, Jewell said.