Bosnia and Herzegovina's real GDP is expected to grow four percent in 2021 after contracting 3.2 percent in 2020, with the institutional and governance reforms remaining important challenges on the country's development path and its road to the EU membership, the World Bank's semi-annual Regular Economic Report for the Western Balkans Greening the Recovery.

It said that the region is rebounding from the recession caused by the COVID-19 pandemic of 2020 thanks to the recovery in 2021 that was faster than expected.

“The outlook for the region has improved significantly, with GDP growth now projected to reach 5.9 percent in 2021, after a 3.1 percent contraction in 2020. Growth in the region is projected at 4.1 percent in 2022 and 3.8 percent in 2023,” said the World Bank.

As for Bosnia and Herzegovina, its real GDP is expected to grow 4 percent in 2021 after contracting 3.2 percent in 2020, according to the report.

“As BiH’s economy rebounds in 2021, improvements in labor market participation and employment will remain key for growth to translate into poverty reduction. Addressing bottlenecks causing persistent long-term unemployment, such as enhancing formal labor market participation, especially for women, and reducing skills mismatches for youth, will be key. The report also notes that institutional and governance reforms remain important challenges on Bosnia and Herzegovina’s development path and on the road to EU membership,” it added.

Christopher Sheldon, World Bank Country Manager for Bosnia and Herzegovina and Montenegro noted that the implementation of the “much needed structural reforms in BiH” was made even more urgent die to the COVID-19 pandemic.”

“The World Bank is committed to helping the governments in BiH develop long-term solutions that will build a more resilient, inclusive economy in the post-pandemic era, by improving human capital, enhancing the efficiency of the public sector, enabling the growth of the private sector and reducing the vulnerabilities of the country to climate change,” he added.