The right-wing parties strengthened further their positions at all levels of central governments in B&H, while voters outcome continues to decline to new record lows (45% of citizens decided not to participate).

To a certain extent, the only surprise was the victory of moderate politician Zeljko Komsic for the Croat seat in the Presidency who has already served two terms in the Presidency (from 2010 and 2014). The major Croat right-wing party (HDZ) disputes Komsic’s legitimacy as a Croat representative, arguing that he was supported primarily by Bosniak, not Croat votes from the Federation of B&H.

Our baseline scenario is that the new governments at all levels will be established in a short period of up to six months (which is indeed a short period given the complexity of the B&H political system). The election results clearly show that the country is polarised and divided along ethnic lines and that the nationalist SNSD/SDA/HDZ coalition is (mathematically and by need of representation of all three constitutive nations) the only solution for B&H to get newly elected authorities at all levels.

No major impacts on our forecasted growth of 3% in 2019 and in 2020.

We expect renewed negotiations with the IMF on a new program after the central governments are established in H2 2019, and slow implementation of the EU reforms in future

B&H could acquire Candidacy status in late 2019

Please find linked the analysis Macro FI CEE Special BH elections_12_10_2018