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 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.