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Country Risk Service Bosnia-Hercegovina Updater

  • ID: 2131064
  • Country Profile
  • June 2021
  • Region: Global
  • 20 Pages
  • The Economist Intelligence Unit
In the March assessment the sovereign risk score for Bosnia and Hercegovina (BiH) stood at 55 and the rating remained at B. The rating mainly reflects the low public debt/GDP ratio, which stood at 38.4% of GDP (far below the median for B-rated countries). Access to finance is limited, but IMF, World Bank and EU funding will ensure that BiH meets its external debt obligations this year.

The rating remained at B, but the score improved, mostly driven by a jump in foreign-exchange reserves in the fourth quarter of 2020. Foreign-exchange reserves are adequate and the Central Bank of BiH is committed to the currency-board arrangement, under which the convertible marka is pegged to the euro. Large external imbalances pose a threat to the rating.

The rating remained unchanged, at B, but the score improved by 3 points to 55, reflecting growth in net foreign assets and foreign-exchange reserves. The foreign-dominated banking sector has fairly high capital and liquidity buffers, and the Tier 1 capital/risk-weighted assets ratio improved to 18.1% in December. The Covid-related economic crisis is likely to drive a further deterioration in asset quality.
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Country Risk Service Bosnia-Hercegovina Updater

Risk assessment
Sovereign risk
Currency risk
Banking sector risk
Political risk
Economic structure risk

Definitions
Sovereign risk
Currency risk
Banking sector risk
Political risk
Economic structure risk
Overall country risk

Central scenario for 2021-25: Political stability

Central scenario for 2021-25: Election watch

Central scenario for 2021-25: International relations

Central scenario for 2021-25: Policy trends

Central scenario for 2021-25: Fiscal policy

Central scenario for 2021-25: Monetary policy

Central scenario for 2021-25: Economic growth

Central scenario for 2021-25: Inflation

Central scenario for 2021-25: Exchange rates

Central scenario for 2021-25: External sector

Key risk indicators

Ratings summary

Quarterly indicators

International assumptions summary

Economic structure

Public finances

Exchange rates, interest rates and prices

Financial sector

Current account

International liquidity

Foreign payment and liquidity indicators

External trade

External financing requirement

External debt stock

External debt service
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