Spring round of macroeconomic projections for the period 2025 – 2027 4/17/2025 Tweet PDF - Spring round of macroeconomic projections for the period 2025 – 2027 In the spring round of macroeconomic projections for the period 2025 – 2027, economic activity and inflation for 2025 have been revised, compared to the autumn round of projections Key messages: The projection of economic activity growth in BH in 2025 has been revised downwards, to the level of 2.4%, mainly due to the external demand weakening, which will be reflected in exports and investments, which are affected, among other things, by the base effect from 2024. The most significant contribution to economic growth in short term is expected from personal spending, due to the nominal wage growth and the expected inflow of remittances from abroad. We are currently expecting the growth dynamics to gradually intensify by the end of the projection horizon, but we stress significant risks of downward revision as early as in the next round of medium-term macroeconomic projections. In addition, the projected economic growth rates are not yet at levels that would result in faster progress in transition process. Domestic inflation pressures have increased significantly since the beginning of the year. In 2025, we project inflation of 3.5% (+1.7 percentage points compared to the previous round of medium-term macroeconomic projections). Domestic inflation pressures are expected to gradually weaken in the projection horizon, but revisions are possible due to a stronger than calibrated spillover effect of minimum wage growth to other activities, and further adjustments of average wages to inflation, in the environment of current labour market frictions. The estimated values of real GDP, its components and other macroeconomic variables are exposed to an exceptionally high degree of uncertainty regarding economic activities in the main trading partners’ countries, political circumstances at the global and local level, but also possible considerable effects of changes in the domestic labour market on the price competitiveness of domestic products and services.
