This report covers the main macroeconomic releases from September 6 until October 5, 2015 as well as the financial and political events that took place in Bosnia during this period.
Ratings agency S&P has affirmed its credit ratings on Bosnia at B/B on expectation of continued and significant international support. The outlook is confirmed at stable. On the other hand, S&P noted that the ratings were constrained by the country’s fragile, overlapping government institutions, weak fiscal management framework, and vulnerable external position arising from persistent current account deficits.
The prime ministers of Bosnia’s two entities – the Muslim-Croat Federation and the Serb Republic, have agreed on action plan for 2015 and 2016 for the implementation of the Reform Agenda, agreed with the European Union.
The European Union lifted the ban on imports of milk and dairy products from Bosnia it has imposed in August.
The council for the protection of vital interests of the Constitutional Court of Bosnia’s Serb Republic ruled that that the decision to hold a referendum on the authority of the state-level judiciary institutions and of the High Representative does not discriminate any nationality, rejecting the claim of Bosniaks that it is against their vital interests. At the same time, the High Representative Valentin Inzko submitted a report to the United Nations, informing the secretary general and the security council of the planned referendum.
On the corporate side, Royal Dutch Shell decided it will not try to secure a concession for oil and gas exploration in Bosnia and Herzegovina. The potential deal would have secured an investment of between $300mn and $700mn in exploration work depending on the number of drilling sites.

Key points:
• CPI deflation stayed at 1.1% y/y for the second month in a row in August.
• The working-day adjusted industrial production rose by 7.2% y/y in August, improving from a 2.3% y/y in July.
• The foreign trade gap narrowed by 6.3% y/y to €2.3bn in the first eight months of 2015.