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BOSNIA AND HERZEGOVINA: BEFORE AND DURING THE CRISIS

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Presentation on theme: "BOSNIA AND HERZEGOVINA: BEFORE AND DURING THE CRISIS"— Presentation transcript:

1 BOSNIA AND HERZEGOVINA: BEFORE AND DURING THE CRISIS
Dr Fikret Čaušević Regional Cooperation Council Sarajevo, Holiday Inn Hotel, 24 February 2010

2 FINANCIAL SECTOR: COMMERCIAL BANKING IN BiH AS PART OF EU MARKET
BiH is already integrated into the European banking system Most international standards relating to banking regulations are already in place in BiH Except of integration of the two entities’ banking agencies into a single or the state-level agency Foreign banks have contributed to the development of commercial banking in BiH – both in terms of technological improvement and by decreasing interest rates in the period The year 2009 has seen an increase in average interest rates on loans to enterprises and citizens

3 GROSS DOMESTIC PRODUCT AND ASSETS OF THE BANKING SECTOR (millions of KM)

4 BANKING SECTOR ASSETS AND CREDITS TO ENTERPRISES AND TO HOUSEHOLDS IN
BOSNIA AND HERZEGOVINA Year Assets of banks Credit to enterprises Credit to households GDP (mill.KM) Millons KM In % Millions 2000 4,265 44.4 2,548 26.5 384 4.0 9,611 2002 6,345 54.5 2,697 23.2 1,456 12.5 11,651 2003 7,688 53.0 3,026 20.9 1,966 13.6 14,505 2004 9,408 59.6 3,178 20.1 2,627 16.6 15,786 2005 11,875 70.2 3,056 18.1 3,453 20.4 16,927 2006 14,700 76.9 4,760 24.9 4,480 23.4 19,121 2007 19,173 88.6 5,839 27.0 5,754 26.6 21,641 2008 20,802 84.2 7,322 29.6 6,524 26.4 24,720

5 MERCHANDISE EXPORT, IMPORT, TRADE BALANCE AND TRADE VOLUME OF BOSNIA AND HERZEGOVINA 2000-2009
- millions of KM

6 BOSNIA AND HERZEGOVINA
MERCHANDISE TRADE OF BOSNIA AND HERZEGOVINA - milions KM YEAR Import Export Trade Balance Trade Volume 2000 2,265 6,583 - 4,318 8,848 2002 2,089 8,048 - 5,958 10,137 2004 2,819 9,306 - 6,487 12,125 2006 5,164 11,389 - 6,225 16,553 2007 5,937 13,899 - 7,962 19,836 2008 6,888 16,314 - 9,426 23,202 2009 5,530 12,348 - 6,818 17,878

7 CHANGES IN CREDIT ACTIVITY: THE BANKING SECTOR OF BOSNIA AND HERZEGOVINA (millions of KM)

8 CHANGES IN CREDIT ACTIVITY AND TRADE DEFICIT OF BOSNIA AND HERZEGOVINA (millions of KM)
Period Change in credit to enterprises Change in credit to households Change in trade balance 2004/2003 + 144 + 662 + 491 2005/2004 + 774 + 838 + 908 2006/2005 + 804 + 942 2007/2006 + 1,079 + 1,274 + 1,737 2008/2007 + 1,591 + 1,102 + 1,464 2009/2008 - 85 - 446 - 2,610

9

10 (BiH / number of countries included)
TRADE DEFICIT, CURRENT ACCOUNT DEFICIT AND COMPETITIVENESS OF BOSNIA AND HERZEGOVINA Year Trade deficit (% GDP) Current Acc.def. 2002 - 54.0 - 19.3 2004 - 45.6 - 16.3 2006 - 34.8 - 7.9 2008 - 38.1 - 14.9 2009 - 29.0 - 10.5 Year Ranking in GCR (BiH / number of countries included) 2004 81 / 104 2006 82 / 122 2007 106 / 131 2008 107 / 134 2009 109 / 133

11 EXTERNAL DEBTS OF SEE COUNTRIES (EBRD: Transition Report 2008)
Country External debt / GDP (in % of GDP) External debt / Exports of goods and services 2002 2004 2007 Albania 26.6 26.0 26.4 128.9 118.8 94.4 Bosnia and Herzegovina 58.9 50.9 48.5 253.5 173.1 116.6 Bulgaria 72.5 70.1 104.5 149.7 123.8 166.4 Croatia 61.9 80.0 88.6 136.1 161.0 181.1 FYR Macedonia 43.6 38.7 36.3 120.0 97.7 Romania 37.0 39.3 42.2 104.8 109.5 138.1 Serbia 70.6 57.8 64.0 379.3 253.7 222.4 Slovenia 55.6 62.3 108.6 85.2 97.6 143.8

12 EXTERNAL DEBT OF CEE COUNTRIES AND BiH (EBRD: Transition Report 2008)
Country External debt / GDP (in % of GDP) External debt / Exports of goods and services 2002 2004 2007 Bosnia and Herzegovina 58.9 50.9 48.5 253.5 173.1 116.6 Estonia 64.4 83.5 120.8 90.3 114.6 163.2 Hungary 55.4 69.4 98.9 87.7 107.3 123.9 Latvia 75.6 97.7 142.4 186.2 224.1 327.4 Lithuania 43.8 46.5 78.5 82.5 89.1 141.6 Poland 42.8 51.3 55.2 149.5 136.2 133.1 Russia 49.2 38.6 36.0 140.5 110.6 118.5 Slovak Republic 53.9 56.3 59.1 76.8 75.8 68.7 Slovenia 55.6 62.3 108.6 85.2 97.6 143.8

13 WEALTH COEFFICIENTS OF SOUTH-EAST EUROPE COUNTRIES
C O U N T R Y 2007 2000 1990 2000/ (in %) 2007/ Albania 0.417 0.235 0.159 + 47.8 + 77.5 Bosnia and Herzegovina 0.491 0.279 0.643 - 56.6 + 76.0 - 23.6 Bulgaria 0.635 0.301 0.556 - 45.8 + 14.2 Croatia 1.403 0.784 0.912 - 14.0 + 79.0 + 53.8 FYR Macedonia 0.467 0.333 0.553 - 39.8 + 40.2 - 15.6 Romania 0.938 0.320 0.406 - 21.2 Serbia 0.688 0.236 --- Slovenia 2.800 1.879 1.526 + 23.1 + 49.0 + 83.5

14 THE MOST PROBLEMATIC FACTORS - DOING BUSINESS IN BiH ACCORDING TO THE WORLD COMPETITIVENESS REPORT Inefficient government bureaucracy Policy instability Corruption Government instability Tax rates Crime and theft Tax regulations Access to financing Inadequate supply of infrastructure

15 EASE OF DOING BUSINESS IN BOSNIA AND HERZEGOVINA
DB 2010 DB 2009 DB 2008 Doing Business 116 119 105 Starting a Business 160 162 150 Construction Permits 136 137 Emloying Workers 111 109 114 Registering Property 139 149 144 Getting Credit 61 59 13 Protecting Investors 93 88 83 Paying Taxes 128 155 142 Trading Across Borders 63 58 53 Enforcing Contracts 124 126

16 EASE OF DOING BUSINESS IN CROATIA, SEBIA AND FYR MACEDONIA: DOING BUSINES 2010 – IBRD, WB
SERBIA MACEDONIA Doing Business 103 88 32 Starting a Business 101 73 6 Construction Permits 144 174 137 Emloying Workers 163 94 58 Registering Property 109 105 63 Getting Credit 61 4 43 Protecting Investors 132 20 Paying Taxes 39 26 Trading Across Borders 96 69 62 Enforcing Contracts 45 97 64


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