The Central Bank of Bosnia and Herzegovina has begun a World Bank technical assistance project to develop productivity modelling for Bosnia and Herzegovina at company and industry level. Funded by an EU grant under a fiscal governance strengthening project for the Western Balkans, the work is intended to address the absence of a productivity assessment model and support policy analysis in areas including price competitiveness, internal imbalances, equilibrium exchange rate assessment, CBAM effects and regional development, as well as EU candidate country reporting needs. The mission is focusing on methods for measuring productivity using business register data, decomposing total factor and labour productivity trends, and analysing differences by company size, age, industry and ownership. It will also examine the drivers of productivity change, job creation and wages across productivity distributions. The Central Bank of Bosnia and Herzegovina plans to use the estimates to calibrate its macroeconomic projection models, including assessments of potential gross domestic product and the GDP gap, through a separate satellite model linked to its existing framework. The analysis will initially be carried out on an anonymous sample of companies in Bosnia and Herzegovina. The central bank plans to update the exercise in coming years and aims to expand coverage to all companies, after which it expects to support relevant authorities in shaping business environment and labour market policies.

Original source Back to tracker