Fast Market Research recommends "Bosnia-Herzegovina Infrastructure Report Q1 2014" from Business Monitor International, now available

Boston, MA -- (SBWire) -- 01/24/2014 --BMI View: The latest data from Bosnia and Herzegovina's statistical authorities have led us to make some downward adjustments to our growth forecasts for the country's construction industry. We now estimate that the sector expanded by just 0.5% in 2013, compared to a prediction of 3.7% previously, and we forecast real industry growth of 1.8% in 2014. While we predict that growth will pick up gradually over the next few years, we believe that persistent political uncertainty and a weak business environment will weigh on the sector's prospects.

Key developments include:

- Final data indicate that the recession in 2012 was not as severe as preliminary estimates suggested, with a full year contraction of 0.9%, according to the Bosnia-Herzegovina Agency for Statistics (BHAS). Fixed investment rose by 1.5% in 2012, a marked slowdown from the 7.3% outturn recorded in 2011. While there are still no quarterly data GDP releases in Bosnia, our country risk analysts maintain that the country witnessed a modest recovery of 0.5% in 2013 and we expect this to gather momentum in 2014.
Nevertheless, we expect gross fixed capital formation (GFCF) to be among the weaker performing components of GDP over the near term as investor sentiment towards the country remains subdued. - A consortium, comprising German subsidiary of European construction company Strabag, Euro-Asfalt and ZGP, has secured a contract worth EUR84mn (US$113.31mn) to construct the Svilaj-Od?ak section of the international motorway corridor 5c in Bosnia. Under the contract, the consortium would be responsible for the construction of the roadway, the border crossing at Svilaj, the Svilaj toll station, two service areas and two motorway exits. The construction work on the 10.4km-long section is scheduled to start in October 2013. The construction would be completed in 14 months, with the motorway to be opened for traffic in December 2014.
- Bosnia continues to score weakly compared to its regional peers in our Infrastructure Team's risk/reward ratings (RRRs) for Central and Eastern Europe (CEE). In the latest update, the country ranks a lowly 15th out of 16 countries (ahead of only Ukraine). Among others factors dragging down its score are: restricted government spending, endemic corruption, and an overreliance on capital inflows.
- A power deal announced in July between Bosnia-Herzegovina and Croatia highlights the formers strategy to leverage is competitive advantage as a regional power exporter, as well as the latter's aim to reduce power net import dependency and to upgrade its infrastructure ahead of EU admission. The joint power project is a win-win situation for a region in desperate need of power infrastructure renewal.

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