| Abstrakt: |
The lengthy process of forming governments at all levels in Bosnia and Hercegovina (BiH) following the nationwide elections held in October 2006 is finally nearing completion. Amid heavy international pressure, the main political forces in BiH have agreed to form a seven-party coalition at central state level. However, the new government will find it hard to reach a consensus on the internationally backed reform agenda, especially restructuring the entities' police forces and amending BiH's constitution to strengthen state-level institutions. This in turn will probably lead to further delays in signing an EU stabilisation and association agreement (SAA). The currency board arrangement will stay in place during the Economist Intelligence Unit's 2007-08 forecast period. Inflation rose sharply following the introduction of value-added tax (VAT) in 2006, but will fall back in 2007-08. Strong investment will drive annual average real GDP growth of 5.4%. The annual current-account deficit will remain large, at an average of almost 14% of GDP. [ABSTRACT FROM PUBLISHER] |
