S&P Affirms Bosnia and Herzegovina Sovereign Ratings at B+
S&P Global Ratings affirmed Bosnia and Herzegovina’s long‑term sovereign credit rating at B+ and its short‑term rating at B on 1 August 2026, maintaining a stable outlook for the long‑term rating.
The agency highlighted that pre‑election fiscal spending, driven by sharply rising pension outlays, higher public‑sector wages and reduced social‑contribution rates, will push the 2026 public‑sector deficit to exceed 3 % of gross domestic product (GDP). In the absence of fiscal consolidation, the average deficit is projected to be 2.5 % of GDP through 2029, with budget deficits averaging almost 3 % of GDP in both 2026 and 2027.
S&P expects net general‑government debt, measured net of liquid assets, to increase from an estimated 21 % of GDP at the end of 2025 to 26 % of GDP by 2029. While this debt level remains moderate by global standards, the agency notes that refinancing risk is heightened during periods of political volatility.
The ratings report underscores that Bosnia and Herzegovina’s institutional and governance framework is among the most complex worldwide. Frequent internal political obstruction, recurring confrontations around election cycles, and recent tensions between the Republika Srpska entity and the Office of the High Representative, as well as other state institutions, exacerbate sovereign credit risk.
S&P revised its GDP growth forecast for Bosnia and Herzegovina slightly downward to just above 2 % for 2026, citing the adverse impact of the Middle‑East conflict, elevated energy and transportation costs, and weakening external demand from key EU export markets, notably Germany and Italy. The agency projects GDP per‑capita to reach US$11,100 in 2026, remaining considerably below the average of most European nations.
The article was generated with AI assistance and reviewed by an editor.