Thursday, November 6, 2008

WORLD BANK: BOSNIAN ECONOMY IS NOT LIKELY TO GO INTO RECESSION

SARAJEVO, Bosnia (November 6,2008) - Head of the World Bank Office in Bosnia Marco Mantovanelli expects the impact of the global crisis to be felt in the country through several transmission mechanisms.

First of all, loans will be harder to get, and their price will increase, both for the corporate and the retail sector. Secondly, the capital inflow from other private sources (FDI, for example) will be reduced for a while. Thirdly, demand for the products exported by the Bosnian companies is likely to decrease, and, finally, the trend of growing remittances will slow down, or even take the opposite direction,he said.

According to Mantovanelli, the Bosnian economy is not likely to go into recession, but GDP, employment and tax revenue growths from the previous years are almost certain not to continue in 2009.

Bosnia's political leaders and regulators in the financial sector need to develop measures for strengthening regulatory control, Mantovanelli recommends.
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2 comments:

everyday reader said...

Still, I have to repeat my previous request - add original sources (links or newspaper/article/date) to your posts, even if they are in Bosnian. That would improve your blog's reliability a lot.

Carmel said...

I appreciate the delicacy of the World Bank's position in trying to maintain confidence. But really, no recession? how are we now to take any of the bank's statements seriously? This assumes some kind of magic. Europe is falling of a cliff, Eastern Europe is flying off a bigger cliff, but BiH will somehow be unharmed. Maybe this is based on the normally dismal exports. But BiH is heavily dependent on outside funds. Such funds are about to become quite scarce; aid is about to dwindle; projects are about to face funding problems. If this does not translate into a recession, then what in the world could?
Be serious. We are adults.