This report covers the main macroeconomic releases from March 5 until April 4, 2014 as well as the financial and political events that took place in Bosnia during this period.

Bosnia needs to launch the key labour market reforms this year to improve its business environlment and spur growth, the IMF’s resident representative in Sarajevo, Ruben Atoyan told local media in March. The statement came after earlier last month several officials from Bosnia’s Federation and the Serb Republic voiced concerns saying that the extension of the country’s stand-by agreement with the IMF might be at risk because the lender has set unrealistic conditions.

On the economic front, Bosnia’s Serb Republic economy expanded by 2.1% in 2013 improving from a 1.1% contraction the year before, underpinned by higher industrial, agriculture and public administration sectors' output. The CPI declined 1.6% year on year in February following a 1.5% year on year drop the month before, dragged down by falling food, transport, clothing and footwear and furnishings costs.

The industrial production grew 6.5% year on year in February, speeding from a revised 5.3% year on year hike the month before, due to stronger increase in mining and manufacturing sectors output which offset falling utilities production. February’s retail trade turnover swung to a 1.9% year on year increase in real terms, after edging down 0.6% year on year the month before, thanks to a faster rise in sales of non-food products and a slower drop in food, beverages and tobacco sales.

Bosnia’s jobless rate inched up to 44.6% at end-January 2014 from 44.5% at end-December 2013, the country’s labour and employment agency said. The 2013 current account deficit shrank 39.8% to EUR 734mn after declining 5.1% the year before, mainly due to falling foreign trade gap and higher investment income from abroad, central bank data showed.

Commercial banks assets rose 5.4% year on year to EUR 12.0bn at end-February, quickening slightly from a 5.3% year on year hike the month before, due to stronger lending activity. Loan growth speeded to 3.8% year on year in February and was above the 2013 average of 2.8%.

Bank deposits grew 8.8% year on year to EUR 7.4bn at end-February, quickening from a 7.8% year on year hike at end-January, lifted by stronger corporate deposit collection, central bank data showed. Bosnia’s central bank gross foreign reserves 8.9% year on year to EUR 3.6bn in February, cooling from a 11.0% year on year hike at end-January.