Central Bank of Bosnia and Herzegovina participates in European Commission projections meeting and flags likely higher inflation and lower activity revisions

The Central Bank of Bosnia and Herzegovina (CBBH) reported that its representative participated in the European Commission’s expert meeting on the spring round of medium-term macroeconomic projections for EU candidate countries. Against a backdrop of heightened uncertainty, the CBBH indicated it is almost certain that both the European Commission and the CBBH will revise their Bosnia and Herzegovina projections in the spring round, with inflation expected to be revised upwards and economic activity downwards compared with the autumn 2024 projections. The projections meetings are held twice a year and typically bring together central banks and finance ministries from candidate countries; for Bosnia and Herzegovina, participants include the CBBH and the Bosnia and Herzegovina Directorate for Economic Planning. The release highlighted global factors likely to affect the EU outlook, including the increasing likelihood of a full trade war and the impact of United States tariffs, alongside Germany’s removal of public debt restrictions and plans for higher infrastructure and defence spending across EU member states. On the domestic side, the CBBH pointed to a strengthening wage-inflation spiral, unprecedented labour market developments that complicate forecasting, and signs of weakening competitiveness. European Commission projections for candidate countries, and the candidate countries’ own projections, are published in May and November.