BiH’s real GDP growth inched up to 2.7% y/y in Q1 from 2.6% y/y the quarter before, according to the latest estimates by the statistical office. GDP rose by 0.4% q/q (sa) in the first quarter of the year, slowing from 0.6% q/q increase the previous quarter, but still indicating sustained growth momentum going forward. Gross value added increased by 2.7% y/y in Q1 with the strongest paces of expansion reported by arts, entertainment and recreation (growing by 12.3% y/y), wholesale and retail trade (8.8% y/y) and financial and insurance activities (6.1% y/y). By contrast, GVA fell in transportation and storage (by 6.4% y/y) and professional, scientific and technical activities (by 2.4% y/y). The strongest contribution to GVA increase in Q1 had services (about 2pps according to our calculations) whereas wholesale and retail sales, transport, hotels and restaurants had the largest positive contribution to GVA growth of 1.1pps. The mining and manufacturing sectors contributed 0.7pps and 0.6pps to the GVA growth in Q1, according to our calculations.
The statistical office estimated that the economy expanded by 2.1% y/y in 2016, down from 3.1% y/y in 2015. It has earlier put last year’s economic growth at 2.0% y/y. The IMF forecasts GDP growth of 3.0% in 2017, whereas BiH authorities are more upbeat and project that the economy will expand by 3.4% this year. The World Bank sees the economic growth at 3.2%.