SARAJEVO, Bosnia (October 2,2008) - The current global financial crisis is being felt in Bosnia, as well, but the Bosnian government does not seem to be too concerned, or planning to introduce some kind of protective measures, experts in the country warn.
The impact has already been felt by citizens through higher interest rates, the Bosnian Deputy Finance Minister Fuad Kasumovic says.
"Our only hope for avoiding bigger problems is in the recently formed Fiscal Council, whose members should sit down and adopt measures against a financial crisis very soon",he said.
Kasumovic thinks that the Council should support Bosnian exporters in order to reduce a high deficit in foreign trade.
World Bank’s economist in Bosnia Orhan Niksic says the effects of the crisis are also being felt through smaller remittance amounts.
"Furthermore, the banks can no longer borrow abroad under the terms from half a year ago, which makes capital harder to get. In a situation of economic decline, the state should intervene through increased public spending, but the possibility of that happening is questionable considering the dropping budget revenues. That makes constant warnings from the World Bank all the more important," Niksic points out.
Economy professor Fikret Causevic says higher financing costs in Bosnia's main trading partners would weigh on exports and make imports more expensive.
"The higher cost of financing, combined with vulnerable exports and more expensive imports would make recession inevitable," Causevic said.