This report covers the main macroeconomic releases from August 6 until September 5, 2014 as well as the financial and political events that took place in Bosnia during this period.

Despite rising indirect tax revenues in the country since the start of the year, the Indirect Taxation Authority (UIO) has cut its net revenue estimate for 2014 - by 0.8% compared to the initial plan, to reflect the economic impact of the May floods.

The distributive trade sector, which employs some 18% of all employed in the country, contracted by 0.2% y/y due to a drop in the wholesale trade turnover. In addition, the construction sector activities recorded an annual contraction with the value of contracts of Bosnian construction companies abroad shrinking 1.1% y/y because of less activity in Africa.

The report also contains information about the reasons why Bosnia was not included in the 2014-2015 Global Competitiveness Ranking of the World Economic Forum.

On the corporate front, Tropic Group B.V. became the third largest retailer in the country and the largest in Bosnia’s Serb Republic after taking over Delhaize Group local stores earlier this year.

On a positive note, a Bosnian-Macedonian consortium of engineering firms will start the construction of the Banja Luka-Prnjavor motorway in the beginning of September.

Key points:

• CPI remained on its downward trend for twelfth consecutive month in July, dropping 0.9% y/y mainly on a softer decrease in food costs.
• The working-day adjusted industrial production grew 4.0% y/y in July after stagnating the month before.
• The number of employees in Bosnia grew 1.2% y/y in June, while the average net monthly wage rose by a nominal 0.9% y/y to BAM 829. However, the jobless rate inched up to 43.8% at end-June.