The Central Bank of Bosnia and Herzegovina published its latest nowcast for real GDP growth in the first and second quarters of 2025 and its short-term inflation outlook, lowering its estimate for first-quarter activity and setting out inflation projections through the third quarter. Real economic activity in the first quarter of 2025 is estimated to have grown by 2.2% year on year, 0.4 percentage points below the previous nowcast, with weaker domestic demand weighing on the trade sector and a continued negative contribution from manufacturing. The preliminary estimate for second-quarter real GDP growth is 2.5%, driven mainly by expected stronger growth in services. For inflation, the bank estimates headline inflation at 3.3% and core inflation at 4.0% in the second quarter of 2025, with a preliminary third-quarter estimate of 3.0% headline inflation and 4.0% core inflation; food and services are cited as the main drivers, reflecting higher input costs and knock-on wage effects from the minimum wage increase. The nowcast is described as consistent with the medium-term annual macroeconomic projections published in April, while short-term uncertainty, particularly around inflation, remains high and could be amplified by potential international commodity price shocks, especially in energy.
Central Bank of Bosnia and Herzegovina 2025-06-19
Central Bank of Bosnia and Herzegovina revises Q1 2025 GDP nowcast to 2.2% and projects 3.3% inflation for Q2
The Central Bank of Bosnia and Herzegovina revised its nowcast for real GDP growth, estimating a 2.2% increase in Q1 2025, down 0.4 percentage points from previous forecasts, and a 2.5% growth in Q2 driven by services. Inflation is projected at 3.3% headline and 4.0% core in Q2, with Q3 estimates at 3.0% headline and 4.0% core, influenced by higher input costs and wage effects. The nowcast aligns with medium-term projections, though short-term inflation uncertainty remains due to potential international commodity price shocks.