Governor of CBBiH optimistic: Recession will not occur

SARAJEVO, (Patria) - Governor of the Central Bank (CB) of BiH Senad Softić stated that forecasts show that a recession will not occur, and that an increase in interest rates is possible.

- The situation in CBBiH is excellent and stable. We are working in the best possible way, we have a stable currency. We contribute to monetary stability. We have successfully completed the business year.

We have adapted excellently to changes in financial markets. We finished 2022 with a profit of around 26 million. We have not made such a profit in 3.5 years. In January alone, we will have revenue equal to that of two years prior - Softić told Hayat.

He spoke about the work of this umbrella financial institution of Bosnia and Herzegovina, the way of fighting inflation, economic trends in Bosnia and Herzegovina, the region, and Europe this year, and other current issues.

- The war in Ukraine surprised everyone. It caused a sharp jump in energy prices, but also concerns about security, inflation, and it halted the European economy.

It was uncertain how we would finish that year regarding energy. Europe endured the challenges brought by the war much better. Now we are already a little optimistic.

We had high demands for cash. We satisfied all the banks' demands. We showed that we have enough money. That money has the trust of the citizens - Softić added.

He also touched upon whether we can expect a decrease in interest rates.

- Forecasts indicate that a recession will not occur. Inflation will decrease. There will be a lower reduction in growth. We had 14 percent inflation in 2022. If these assumptions remain, there will be a reduction in price growth in the medium term.

By 2025, we should have a target inflation of two percent. We do not foresee a recession. This situation we have experienced is unusual. Some situations are not known to economic theory - Softić stated.

He added that regarding the increase in interest rates, Softić said that there will be a slight increase.