Bosnia and Herzegovina experienced a dynamic first half of the year, marked by significant financial and economic developments. This period saw varied performances across its financial markets, notable increases in tax revenues for both the Federation and the Serb Republic, and strategic moves in the private sector, alongside plans for the nation’s first international bond issuance.

Economic Performance and Fiscal Health

Bosnia and Herzegovina’s economic landscape in the first half of the year presented a mixed but generally positive picture, particularly concerning public finances.

  • Tax Revenue Growth: Both entities within Bosnia and Herzegovina reported substantial increases in tax revenue.
    • The Federation of Bosnia and Herzegovina saw its tax revenue rise by 13.3% year-on-year in H1.
    • The Serb Republic also reported a healthy 7% increase in tax revenue during the same period.
  • Inflation Outlook: The Central Bank of Bosnia and Herzegovina projects inflation to stabilize at 3.4% by 2025, indicating a move towards economic stability.

Financial Market Activity

The Sarajevo Stock Exchange (SASE) showed resilience and growth despite some monthly fluctuations.

  • Overall H1 Performance: SASE boosted its turnover by 39% year-on-year in the first half of 2024, reflecting increased market activity.
  • June Performance: While the overall H1 was strong, June saw a plunge in turnover, though key indices largely remained positive.

Strategic Investments and Infrastructure

Significant developments in both the private and public sectors highlight a focus on growth and infrastructure.

  • ASA Group’s Acquisition: Bosnia’s ASA Group expanded its regional footprint by acquiring Zito Backa, a wheat mill in Serbia. This strategic move positions ASA Trading as a major player in the grain trading and milling sector in Serbia.
  • VC Corridor Financing: The Bosnian government approved increased financing for a section of the crucial VC Corridor, signaling continued investment in national infrastructure projects.
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Entry into International Debt Markets

A landmark financial move is on the horizon for the Federation of Bosnia and Herzegovina.

  • Inaugural Eurobond: The Federation is preparing to issue its first-ever €350 million bond with a 5-year maturity. This marks a significant step towards establishing its presence in global debt markets.
  • Stabilization Managers: Deutsche Bank AG, Merrill Lynch International, and UniCredit Bank will serve as stabilization managers for this historic issuance.

Key Takeaways

  • Bosnia and Herzegovina’s economy demonstrated robust tax revenue growth in H1.
  • The Sarajevo Stock Exchange experienced significant overall turnover growth despite monthly variations.
  • Strategic private sector investments, like ASA Group’s acquisition, are expanding regional influence.
  • The upcoming inaugural Eurobond issuance signifies a major step for the Federation of Bosnia and Herzegovina in international finance.

Sources

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