Bosnia and Herzegovina's Central Bank said on Wednesday that a strong economic downturn could be expected in 2021, including a sharp GDP decline, and that signs of economic recovery would not be visible before 2022.

The bank says in an analysis that due to the Covid-19 pandemic, stagnation can be expected in all sectors of society and the economy this year, and that in the next two years one should not expect real GDP to go up by over 3%.

“Reaching the pre-crisis level of economic activity is expected in 2022 at the earliest. The previous projection of stronger recovery in 2021 has been postponed until the end of the projection period, primarily due to the intensity of the pandemic’s second wave, but also a weaker-than-expected effect of government spending on economic activity in the country during 2020,” the analysis says.

Central Bank economists project real GDP to drop by 4.6% this year, to grow by 2.7% at the most in 2021 and by 3% in 2022.

Due to the pandemic, this year BiH will see a drop of at least 13.3% in investments and 17% in exports. Next year both are expected to grow by 10% each.