ЕCONOMIC MONITOR No. 10 OCTOBER
TABLE OF CONTENTS 1 Introduction... 1 2 Total IRBRS investments... 2 2.1 Loans... 3 3 IRBRS loans and their impact on the economic structure... 4 4 Employment stimulation... 6 5 Balanced regional development... 6 6 Housing loans... 6 7 IRBRS activities on the RS financial market... 7 8 International relations... 8 9 Overview of macroeconomic trends in RS and the region... 9 10 STATISTICAL ANNEX... 11 Таble 1: Quarterly RS Gross Domestic Product, real growth rates, production approach... 11 Таble 2: Indices of physical volume of RS industrial production... 11 Таble 3: Indices of physical volume of BiH industrial production... 12 Таble 4: RS Construction activity, indices... 12 Тable 5: RS Unemployment... 12 Тable 6: Average RS net salary, by sector, in BAM... 13 Тable 7: Average BiH net salary, by sector, in BAM... 13 Тable 8: Overview of inflation trend in RS, measured by Consumer Price Index- CPI... 14 Tаble 9: Lending interest rates in RS, in %... 14 Таble 10: Lending interest rates in BiH, in %... 14 Table 11: RS and BiH Foreign Trade, in 000 BAM... 15 TABLE OF CONTENTS II
ACRONYMS RS BiH BARS IRBRS GDP y/y pp BAM EU IMF RSIS BHAS ILO EUROSTAT USA CL Q CBBH RSEI Republic of Srpska Bosnia and Herzegovina Banking Agency of the Republic of Srpska Republic of Srpska Investment-Development Bank Gross Domestic Product Year over year (same period last year) Percentage Point Convertible Mark European Union International Monetary Fund Republic of Srpska Institute of Statistics Bosnia and Herzegovina Agency for Statistics International Labour Organization Statistical Office of the European Union United States of America Credit Line Quarter Central Bank of Bosnia and Herzegovina Republic of Srpska Employment Institute ACRONYMS III
LIST OF TABLES AND CHARTS Table 1: Table 2: Overview of IRBRS loans by credit lines, as of 30 June, in BAM Overview of approved corporate loans in RS, by sector, as of 30 June, in BAM Chart 1: Structure of total IRBRS investments as of 30 June, Chart 2: Total IRBRS investments, in BAM Chart 3: Structure of IRBRS loans, by purpose, as of 30 June Chart 4: Chart 5: Chart 6: Chart 7: Chart 8: Chart 9: Comparative overview of agriculture and manufacturing sector shares in the structure of IRBRS loans approved to domestic corporate sector and in RS GDP, in %; Share of IRBRS corporate loans in total corporate loans of the RS banking sector, in % Share of IRBRS housing loans in total housing loans of the RS banking sector, in % IRBRS investments in securities, by purpose Quarterly real GDP growth rates, in %, y/y Industrial growth, in %, y/y LIST OF TABLES AND CHARTS IV
1 Introduction The Republic of Srpska Investment Development Bank (hereinafter: IRBRS) was founded in 2006 by the Republic of Srpska Government. The main objective of the Bank is efficient management of the assets owned by the Republic of Srpska. The start of the loan programme implementation in April 2008 marked the commencement of its operational activity. Today, after almost five years of the IRBRS s operational work, the overall results and achievements of the Bank need to be summarized and presented to the public. Thus we have decided to devote this 10th, special issue of the Economic Monitor to the results achieved and effects of the total IRBRS activities on the domestic social and economic trends. This issue of the Economic Monitor also contains a short overview of the most important macroeconomic trends in RS and the region, as well as the Statistical Annex with updated information presenting the domestic economic trends. IRBRS has been designed and developed as a long-term and self-sustainable project with tendency to acquire a leading role in the development and diversification of the domestic financial market which is fully able to meet the needs of economic subjects in RS. Since its establishment, the Bank has been recognized as one of the most important pillars of the financial support to domestic economy by providing continuous support to the socioeconomic growth and development of RS, maintenance and increase in the level of employment, development of the capital market, implementation of infrastructure projects as well as provision of housing to the social groups of special interest and importance for RS. By the end of the first half of, the Bank has invested almost BAM 1.1 billion. Over BAM 730 million have been invested in domestic economy through loans and investments in securities, while the implementation of infrastructure projects and local community projects has been supported with about BAM 100 million. Since the commencement of the Bank s operations, the share of IRBRS corporate loans in the total number of loans provided to the domestic corporate sector by the RS banks has been continuously rising. At the end of the first half of, it reached the level of 19.6%, which is by 14.6 pp higher than at the end of 2008. Similar positive trend was observed in the case of the IRBRS housing loans the share of which in the total housing loans of the RS banking system increased from 10.3% as at end of 2008 to 29.3% as at the end of the first half of. A continuous rise in the demand for products of the Bank and its competence to meet such demands are the most reliable proof of successful IRBRS business activities and positive impacts which are made on the social and economic community as a whole. By its investment activities, IRBRS has ensured a significant contribution in the development and creation of the capital market in RS and established itself as one of the key domestic institutional investors. As at 30 June, the Bank s investments in securities participated with 16.3% in the structure of the overall turnover at the Banjaluka Stock Exchange. Owing to the concept of countercyclical action, IRBRS has made a significant contribution in the process of mitigation and overcoming of adverse effects of the global financial and economic crisis. By maintaining its lending activity, but also overall investment activities in times of limited availability of financing and the problem of high insolvency, it has successfully justified its role of the key financier of the domestic economy, simultaneously providing an added dimension of stability of the RS financial sector. Besides, the Bank supported the capital strengthening of the domestic financial sector with BAM 27.0 million. At the beginning of, IRBRS became a corresponding member of the European Association of Public Banks (EAPB). By acquiring this membership, the Bank has received an international recognition for its past work and the results achieved. Introduction 1
2 Total IRBRS investments In the previous period, the Bank has been providing a continuous financial support in maintaining the stability as well as economic growth and development of RS, keeping the current jobs and creating new job opportunities, development of the capital market, implementation of infrastructure projects and provision of housing to young people and young married couples. Thus, as of 30 June, almost BAM 1.1 billion has been invested, namely BAM 892 million through credit lines and BAM 188.5 million through investments in securities (see Chart 1). Chart 1: Structure of total IRBRS investments, as of 30 June loans investments in securities introduction of two new credit lines which have been made available in cooperation with international financial institutions, 1 as well as significant support to the domestic economy through investments in corporate bonds 2 have contributed to the increase of total investments in 2011 by almost 30% as compared to the previous year, 2010. Chart 2: Total IRBRS investments, in BAM (mil.) 300 250 200 218,213,809 loans 269,711,883 investments in securities 205,118,374 260,806,781 150 126,597,197 100 50 0 2008 2009 2010 2011 I-VI Total IRBRS investments 2 Source: IRBRS Owing to the concept of countercyclical action, i.e. stimulation of the economic activity in unfavourable market conditions, the Bank achieved a record level of investments in 2009 (BAM 270 million), which was the year of escalation of the negative effects of the global economic crisis on domestic financial and real flows and thus provided a contribution to their mitigation (see Chart 2). In order to meet the ever-increasing domestic economy s demand for funding, IRBRS has secured additional, external sources of financing for its activities. Thus, the Source: IRBRS Additional funds for financing of development projects and current liquidity of small and medium enterprises have been secured under favourable terms through new credit lines. By supporting issues of corporate bonds, IRBRS has contributed to maintenance of the stability as well as growth and development of domestic economy. Based on the available data and results achieved in the last six months, it is evident that total investments in will exceed at the last year s level. Under the influence of negative effects of the economic crisis which have been demonstrated by business difficulties and limited access 1) These credit lines are Loans for SMEs (EAF) a credit line provided from the World Bank funds and EIB Loan for SMEs a credit line provided from the funds of the European Investment Bank. 2) In 2010, almost 95% of the total investments in corporate bonds were implemented, which amounted to BAM 54,230,805 as of 30 June.
to sources of finance, the domestic banking sector has decided to apply a more restrictive lending policy which was supposed to secure maintenance of its stability and preservation of liquidity. In such circumstances, a minimal growth and maintenance of the achieved level of credit portfolio of the banking sector has been largely supported by the IRBRS loans, which on average account for 80% of the total loan sources of the RS banks. 3 By maintaining the continuity of its lending activity and the overall investment activities, IRBRS has provided a significant contribution to the maintenance of the social and economic stability in RS in the previous period. 2.1 Loans Until the end of the first half of, the Bank approved financing of 5,841 loan application amounting to BAM 892 million via ten credit lines (see Table 1). In 2010, IRBRS loan programme has been expanded by introduction of loans for unemployed demobilized soldiers. In this way, self-employment of the unemployed members of the RS Army has been encouraged through financing projects in the field of entrepreneurship, small-scale economy and agriculture, which has contributed to fulfillment of concrete social goals and priorities of RS. As of 30 June, almost BAM 5 million have been provided through these loans, under very favourable conditions. Chart 3: Structure of IRBRS loans, by purpose, as of 30 June Corporate sector Municipalities Housing Social programmes - demobilized soldiers 0.6% Table 1: Overview of IRBRS loans, by credit lines, as of 30 June, in BAM Credit line Loans Amount No. of applications Start-up activities 3,057,286.06 89 Micro-business in agriculture 21,388,267.66 1,137 Agriculture 70,249,036.37 87 Entrepreneurs and enterprises 412,169,852.76 573 Housing loans 205,426,957.99 3,584 Municipalities 35,825,000.00 27 Loans for demobilized soldiers 4,960,404.90 284 Loans for SMEs (EAF) 37,301,980.93 38 Loans for SMEs (EIB) 97,783,437.00 20 Loans for enterprises 3,803,000.00 2 TOTAL 891,965,223.67 5,841 Source: IRBRS 4.5% Out of IRBRS loan funds, the RS corporate sector has been supported with a total of BAM 641.6 million 4, BAM 39.9 million have been invested in infrastructure and development projects of local communities, 5 while BAM 205.4 million have been approved via housing loans (see Chart 3). 3) As of 30 June, IRBRS loans accounted for 77% of the total loan sources banks in RS. Source: BARS, Report on Banking System of Republika Srpska for period 1 January to 30 June 4) The domestic corporate sector has been supported by the following credit lines: Start-up Activities, Microbusiness in Agriculture, Agriculture, Entrepreneurs and Enterprises as well as Loans for Small and Medium Enterprises (EAF), EIB Loan for SMEs and Loans for Enterprises. 5) The implementation of infrastructure projects has been supported by the Credit Line for Municipalities and the EIB Loan for SMEs - component related to infrastructure projects. Source: IRBRS 3Total IRBRS investments
3 IRBRS loans and their impact on the economic structure A strong credit support to the domestic economy originates from the strategic orientation of the Bank towards encouragement of activities in the real sector of economy where almost 80% of the total loans have been provided (see Table 2). Table 2: Overview of approved corporate loans in RS, by sector, as of 30 June, in BAM IRBRS loans and their impact on the economic structure 4 As of 30 June Share in SECTOR Approved loans 2011 RS Amount in BAM % GDP, in % A Agriculture, hunting and forestry 95,314,443.5 14.9 10.2 B Fishing 200,000.0 0.0 0.1 C Mining and quarrying 7,280,000.0 1.1 2.2 D Manufacturing industry 319,039,610.7 49.7 9.0 15 Manufacture of food products and beverages 98,289,058.8 15.3 2.1 17 Manufacture of textiles 2,285,000.0 0.4 0.2 18 Manufacture of wearing apparel, dressing and dyeing of fur 2,540,000.0 0.4 0.2 19 Manufacture of leather and leather products, including footwear 5,489,958.4 0.9 0.7 20 Manufacture of wood and of products of wood and cork 74,057,627.2 11.5 1.0 21 Manufacture of pulp, paper and paper products 3,828,823.0 0.6 0.2 22 Publishing, printing and reproduction of recorded media 15,304,182.3 2.4 0.3 24 Manufacture of chemicals and chemical products 10,420,000.0 1.6 0.1 25 Manufacture of rubber and plastic products 14,018,681.4 2.2 0.3 26 Manufacture of other non-metallic mineral products 18,868,928.7 2.9 0.4 27 Manufacture of basic metals 6,250,000.0 1.0 0.4 28 Manufacture of fabricated metal products, except machinery and equipment 30,965,104.1 4.8 1.1 29 Manufacture of machinery and equipment n.e.c. 3,760,502.1 0.6 0.2 30 Manufacture of office machinery and computers 6,798,356.7 1.1 0.2 31 Manufacture of electricity distribution equipment 2,470,000.0 0.4 0.2 33 Manufacture of medical, precision and optical instruments, watches and clocks 300,000.0 0.0 0.1 34 Manufacture of motor vehicles, trailers and semi-trailers 600,000.0 0.1 0.1 35 Manufacture of other transport equipment 60,000.0 0.0 0.1 36 Manufacture of furniture, manufacture n.e.c. 21,206,000.0 3.3 0.5 37 Recycling of metal waste and scrap 1,527,388.2 0.2 0.1 E Electricity, gas and water supply 25,071,400.0 3.9 4.7 F Construction 53,295,541.6 8.3 4.4 G Wholesale and retail trade, repair of motor vehicles, cycles, personal and household goods 17,691,130.0 2.8 12.0 H Hotels and restaurants 31,688,000.0 4.9 1.4 I Transport, storage and communication 15,434,854.5 2.4 6.8 J Financial intermediation 2,000,000.0 0.3 2.8 K Real estate, renting and business services 46,541,475.3 7.3 8.7 M Education 1,714,300.0 0.3 4.7 N Health and social welfare 12,188,121.9 1.9 5.0 O Other community, social and personal service activities 13,122,110.7 2.0 2.2 Unclassified 1,069,871.7 0.2 - TOTAL 641,650,860.0 100.0 - Source: IRBRS and RSIS Observed by sector, IRBRS has provided the largest amount of loans in the sector of manufacturing, namely BAM 319 million or 49.7% of the total loans approved to domestic corporate sector as of 30 June. It is followed by sectors of agriculture, hunting and forestry with BAM 95.3 million (14.9%) and construction with BAM 53.3 million (8.3%). In this way, the Bank has supported further growth and development of activities that represent the backbone of domestic real sector given that they generate around 1/4 of gross domestic product of RS. 6 This support is a reflection of the strategic orientation of the Bank and its commitment to achieving development goals of the domestic economy. 6) In 2011, agriculture accounted for 10.2%, manufacturing 9.0% and construction sector 4.4% in RS GDP. Source: RSIS
Within the manufacturing sector, the largest amount of funds has been invested in the area of manufacture of food products, amounting to BAM 98.3 million. In this way, an increase in employment of domestic manufacturing capacities in this area has been supported, thus creating pre-requisites for decrease in food imports as well as total foreign trade deficit. 7 Besides food industry, IRBRS has recognized metal and wood industry as one the comparative advantages of RS. Funds amounting to BAM 37.2 million have been invested in the metal industry, especially in manufacture of metal products, except machinery (BAM 31 million) and manufacture of basic metals (BAM 6.3 million). BAM 95.3 million has been approved for the RS wood industry, of which BAM 74.1 million is related to manufacture of wood and cork products and BAM 21.2 million, is related to manufacture of furniture and similar products. A higher share of manufacturing and agriculture sectors in the structure of loans granted by IRBRS as compared to their share in RS GDP demonstrates the positive impact of the disbursed loans on the RS economic structure because in this way, the branches that will become future leaders of development will be supported (see Chart 4). After finalization of the investment cycle of the projects financed, further increase in the participation of these two sectors in the economic structure can be expected as well as higher demand for labour force and their positive impact on the decrease of the RS unemployment. As of 30 June, IRBRS corporate loans made up 1/5 of the total credit support provided to the corporate sector by the RS banking sector. Since establishment of the Bank, this share has been continuously rising and at the end of the first half of, it reached the level of 19.6%, which is by 14.6 pp higher than at the end of 2008 (see Chart 5) 7) The share of import of food and live animals in the total RS imports decreased from 15.0% in 2009 to 12.7% in the first six months of. Source: RSIS Chart 4: Comparative overview of the agriculture and manufacturing sector share in the structure of IRBRS loans approved to domestic corporate sector and in RS GDP, in % Share in total corporate loans as of 30/06/ Share in RS GDP in 2011 60 50 40 30 20 10 0 14.9 Agriculture Source: IRBRS and RSIS 10.2 49.7 9.0 Manufacturing Chart 5: Share of IRBRS corporate loans in total corporate loans of the RS banking sector, in % 20 15 10 5 0 31/12/2008 5.0 31/12/2009 12.6 31/12/2010 Source: IRBRS and BARS 15.6 16.1 31/12/2011 16.5 31/03/ 19.6 30/06/ IRBRS loans and their impact on the economic structure 5
Housing loans Balanced regional development Employment stimulation 6 An increased importance of the IRBRS credit support to the corporate sector was particularly observed in 2009 and 2010, immediately after the transmission of the negative effects of the economic and financial crisis to the RS economy. Namely, In conditions when the unemployment problem has reached global proportions, 8 IRBRS is strongly committed to contributing to the maintenance of stability of the domestic labour market. 9 As of 30 June, IRBRS By encouraging a balanced regional development, the Bank strives to raise the overall level of the RS competitiveness as well as its attractiveness to potential domestic and foreign investors. In line with that, the projects implemented in the territory of underdeveloped and extremely underdeveloped municipalities are additionally encouraged by reduction of basic With its housing loans, IRBRS ensured its contribution to fulfillment of the wider social and economic goals and priorities which are reflected in preventing the drain of young and highly educated persons from RS and negative effects which are generated by this undesirable trend. 8 8) According to estimates of the International Labour Organization (ILO), there will be 202 million unemployed persons in the world by the end of, which accounts for 6.1% of the global labour force. In June, the unemployment rate in the EU amounted to 10.4%, while in the eurozone it stood at 11.2%. In the same period, it reached 8.2% in the USA, while the rate of unemployment in Japan in May amounted to only 4.4%. by providing credit support to the corporate sector in conditions of a more restrictive lending policy of the commercial banks in 2009, the share of IRBRS loans increased by 7.6 pp, while in 2010 it increased by additional 3 pp as compared to the end of 2008. 4 Employment stimulation loans have facilitated maintenance of the existing 36,783 and opening of 4,733 new jobs, and thus contributed to mitigation of the negative trends on the RS labour market. 5 Balanced regional development interest rate by 0.5 pp. Besides, a reduction of basic interest rate amounting to 1.2 pp is approved to beneficiaries of housing loans which use the funds to resolve their housing issues in the territory of these municipalities. By the end of first half of, a total of BAM 93.7 million have been granted for financing projects in underdeveloped and extremely underdeveloped municipalities. 6 Housing loans IRBRS housing loans enable the socially vulnerable groups and groups of special interest to RS to resolve their housing problems under very favourable conditions. 9 As of 30 June, the Bank has approved BAM 205.4 million, which secured housing for 3,584 loan beneficiaries and their family members. 9) Increase in employment represents one of the twelve priority goals in the work of the Bank.
Almost 1/3 of total housing loans in RS relate to IRBRS housing loans. Since establishment of the Bank, the share of IRBRS housing loans in total housing loans of the RS banking sector has been continuously increasing, so it grew from 10.3% as at end of 2008 to 29.3% as at end of (see Chart 6). Chart 6: Share of IRBRS housing loans in total housing loans of the RS banking sector, in % 30 25 20 15 10 31/12/2008 17.2 10.3 31/12/2009 24.7 31/12/2010 Source: BARS and IRBRS 28.5 31/12/2011 7 IRBRS activities on the RS financial market By its investment activities, IRBRS has provided its contribution to differentiation of the sources of funding of the domestic economy, local communities and financial sector, as well as maintenance of liquidity of the capital market through increasing the volume of trading. By the end of first half of, IRBRS invested a total of BAM 188.5 million in securities issued by issuers from RS. The Bank s investments in securities participated with 16.3% in the structure of the total turnover at the Banja Luka Stock Exchange. 10 Through investments in securities, IRBRS has invested about BAM 90 million in the RS corporate sector, BAM 58 million in local community projects, 27 million in the capital strengthening of domestic financial sector, 11 and 10) Total turnover at the Banja Luka Stock Exchange amounted to BAM 1,159,721,006 in the period 1 January 2008 to 30 June. Source: Banja Luka Stock Exchange 11) As a part of implementation of the RS Government Programme of Measures for Mitigating Negative Effects of the Global Economic Crisis on the Republic of Srpska, in the last quarter of 2010, the Bank started to invest in securities issued by the commercial banks and insurance companies with registered seat in RS. 28.7 29.3 31/03/ 30/06/ BAM 13.5 million in government bonds (see Chart 7). Chart 7: IRBRS investments in securities, by purpose Source: IRBRS Corporate loans Municipalities Government bonds Financial sector IRBRS activities on the RS financial market Housing loans 7
The Bank supported almost all issues of municipal bonds at the Banjaluka Stock Exchange, 12 guided by the principle of supporting and encouraging other investors as well as purchase of the remaining bonds in the market. Owing to, primarily IRBRS support, municipal bonds have been widely accepted as an instrument of financing of local projects and development initiatives. Owing to its investment activities, the Bank has unquestionably provided a significant contribution to development and building of the capital market in RS and proved to be one of the largest domestic institutional investors with average value of individual transaction amounting to BAM 3.5 million. 13 8 International relations International relations In 2011, IRBRS has successfully started the implementation of financial arrangements with the European Investment Bank, worth EUR 50 million and the World Bank, worth EUR19.1 million, which secured additional funding for the SME sector and infrastructure projects in local communities. By the end of the first half of, a total of BAM 135.1 million have been granted under these credit lines via 58 loan applications. The procedure for expansion of the current financial arrangements is underway, namely arrangement with the European Investment Bank for additional EUR 60 million and the arrangement with the World Bank for additional EUR 36 million. In 2011, the Bank signed the Cooperation Agreement with the China Development Bank which, among other things, envisages development of financial and project cooperation, provision of consultative services and mutual exchange of knowledge 12 and information. Furthermore, the Bank has established cooperation with the Development Fund of the Republic of Serbia, Croatian Bank for Reconstruction and Development (HBOR), and Slovene Export and Development Bank (SID). At the beginning of, IRBRS became a corresponding member of the European Association of Public Banks (EAPB), hence it has received an international recognition for its past activities and the results achieved. The EAPB membership is particularly important from the point of view of establishment and strengthening of the cooperation with similar development institutions of the European countries and regions, improvement of business operations in order to be better informed about the changes on the international financial markets and contribution to enhancement of the international credibility of the Bank and the whole RS. 13 8 12) IRBRS supported 21 issue out of the total 22 issues of municipal bonds on the domestic capital market. 13) In the same period, 106,850 transactions have been implemented via Banja Luka Stock Exchange, with average value of BAM 10,854. Source: Banja Luka Stock Exchange
9 Overview of macroeconomic trends in RS and the region In the first half of, the economic trends and general macroeconomic environment in RS and wider region were influenced by unfavorable global economic trends. The escalation of debt crisis in the eurozone which has affected an increasing number of its members as well as gradual slowdown of the economic activity in the leading European Chart 8: Quarterly real GDP growth rates, in %, y/y 15 economies (Germany and France) have resulted in the worsening of the overall EU and eurozone results. Thus, in the first quarter of, EU and the eurozone GDP grew at a rate of only 0.6% and 0.3%, respectively. 14 In the second quarter, this growth got a negative sign, so at the EU level it amounted to -0.7% and the eurozone -0.9% (see Chart 8). 3,0 2,5 2,0 1,5 1,0 0,5 0,0-0,5-1,0-1,5-2,0-2,5-3,0-3,5 RS Serbia Croatia Slovenia EU 27 ЕА 17 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 Q2 Source: RSIS, Serbian and Croatian Statistics Offices and Eurostat In the first six months of, the industrial production in the eurozone decreased by 2.1%, while this drop at the EU level stood at 1.9% y/y. The contraction of the economic activity reflected negatively on employment rate and consequently on the level of consumption. At the end of June, the unemployment rate in the EU amounted to 10.4%, while in the eurozone it amounted to 11.2%. 1415 Under the influence of the unfavourable trends in the wider region, a mild recovery of the domestic economy in 2010 and 2011 started to lose its intensity. Thus, the fall in 14) In the same period of 2011, this growth at the EU level amounted to 2.4%, whereas in the eurozone it was 2.6%. 15) In order to ensure comparability with data published by the RSIS for the RS and other countries, the unadjusted data were used for GDP growth (seasonally and by number of days). economic activity of export oriented sectors 16 and its negative impact on wider economy also affected the inter-annual contraction of 0.9% of the RS GDP in the first and 0.3% in second quarter of. In the same period, this unfavourable trend was even more noticeable in the regional countries, since Serbia and Croatia, being most important RS international trade partners recorded an interannual economic drop by 1.3% each in the first quarter. During the second quarter, this fall slowed down to -0.8% in Serbia, while in Croatia it was further intensified and reached the level of -2.2% (see Chart 8). 16) In the period January June, RS recorded a 4.1% decrease in exports. In the same period, imports were higher by 0.7% y/y. Source: RSIS 9Overview of macroeconomic trends in RS and the region
Overview of macroeconomic trends in RS and the region Chart 9: Industrial growth, %, y/y. 8 7 6 5 4 3 2 1 0-1 -2-3 -4-5 -6-7 3.6 7.7 4.8-1.3 6.7 5.1 5.4-4.2-6.7-4.2-6.0 RS BiH Serbia Croatia Slovenia ЕU 27 ЕА 17 0.4 I-VI 2011 I-VI -1.9-2.1 Source: RSIS, national statistics offices of Serbia and Croatia, Eurostat Since the beginning of the year, domestic industrial production has been affected by global economic slowdown, while similar trend has been observed in the wider region (see Chart 9). In such circumstances, the RS industrial production recorded a decrease of 4.2% (y/y) in the first six months of. The growth of credit portfolio and a moderate contraction of interest rates marked the trends in the RS banking system during the first half of. Thus, as of 30 June, loans of the domestic banking sector achieved an inter-annual growth of 6.2%. Concurrently, in conditions of increased credit portfolio and nominal salary growth of 1.4%, general level of prices in RS was higher by 2.1% y/y. During the second quarter of, there was a gradual slowdown of negative trends in the domestic labour market. Namely, at the end of June, there were 151,596 persons registered as unemployed, which is by 4,294 persons less in comparison to their number at the end of March. 17 Significant improvements of global economic trends cannot be expected until the end of the year. According to the IMF forecasts, a moderate recovery will ensure in the forthcoming 2013, while domestic economic trends will directly correspond to these global developments. 10 17) Source: RSEI
10 STATISTICAL ANNEX Таble 1: Quarterly RS Gross Domestic Product, real growth rates, production approach Changes compared to the same quarter of the previous year, in % Sector 2009 2010 2011 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 A Agriculture, hunting and forestry -2.4-3.2-7.9-5.4-4.8-5.5-5.2-5.2-4.9-2.9-4.5-4.1 B Fishing 2.5 2.7-23.4-33.9-38.3-35.3 5.5 4.7 4.3 4.5 5.8 4.4 C Mining and quarrying -7.9 25.0 39.4 9.6-2.5 11.0 25.0 14.2 25.4 7.8-0.8-0.5 D Manufacturing 2.0-4.2-3.1 2.3 10.7 6.6 8.8 8.8-2.4-0.2-8.6-6.0 E Electricity, gas and water supply -1.6 3.1 2.1 10.3-13.1 11.0-5.4-6.4 26.6-6.1-2.1-0.4 F Construction -7.8-4.9-12.5-10.3-2.2-8.4-4.6-1.9-7.5-3.5-5.2-3.7 G Wholesale and retail trade, repair of motor vehicles, motorcycles and personal and household goods -12.0-11.2 2.2 1.1 2.3 1.5 1.5 2.3 1.6 1.2 1.6 2.7 H Hotels and restaurants -17.4 4.6-2.6 2.9 8.3 4.9 0.8 0.4 0.0 1.4 2.3 2.9 I Transport, storage and communication -3.4-6.8-0.3 2.9 3.9 2.9 3.1 1.9 1.4 2.3 1.4 1.1 J Financial intermediation 14.8 18.5 1.9 2.3-0.4-0.4 2.2 3.9 3.1 2.9 1.9 4.7 K L Real estate, renting and business activities Public administration and defence, compulsory social security -6.3-7.2 1.5 2.7 3.5 2.4-0.3-1.5-2.7 0.5 0.0 0.9 3.8 0.4-0.6 0.2 1.7 1.8 0.4 0.4 0.2 0.3 0.0 0.3 M Education 2.7 2.4 2.6 2.9 2.6 3.1 3.8 3.9 5.2 3.9 3.1 3.5 N Health and social work 4.5 1.2 3.4 4.1 5.3 3.7 3.5 3.8 3.2 3.4 2.3 3.0 O Other community, social and personal service activities 12.5 1.9 1.9 3.1 3.9 4.5 3.8 4.2 3.6 3.8 3.5 3.1 FISIM (minus) 29.2 29.2 4.3 3.3 1.8 5.1 4.0 5.0 4.2 3.1 5.1 6.7 GROSS VALUE ADDED -3.8-3.6-0.3 0.8 1.1 1.4 1.4 1.1 0.8 0.0-0.9-0.3 Taxes on products, services and import, minus subsides -3.8-3.6-0.3 0.8 1.1 1.4 1.4 1.1 0.8 0.0-0.9-0.3 GROSS DOMESTIC PRODUCT -3.8-3.6-0.3 0.8 1.1 1.4 1.4 1.1 0.8 0.0-0.9-0.3 Source: RSIS Таble 2: Indices of physical volume of RS industrial production Index Period I-XII 2011 Baseline period Same period last year Industry 104.7 94.9 95.8 95.4 94.5 94.6 100.8 95.4 94.4 C) Mining and quarrying 118.2 98.4 97.3 109.9 82.7 102.0 81.9 104.6 101.6 D) Manufacturing 103.9 90.9 93.2 97.1 83.4 92.2 96.8 95.7 93.0 E) Electricity, gas and water supply 100.0 97.9 98.7 90.1 111.3 95.0 117.3 91.1 93.4 Source: RSIS STATISTICAL ANNEX 11
Таble 3: Indices of physical volume of BiH industrial production Index period I-XII 2011 Baseline period Same period last year Industry 105.6 90.6 93.3 93.0 87.2 91.4 94.2 98.9 94.6 C) Mining and quarrying 115.6 100.6 98.0 107.5 89.1 105.0 88.3 97.8 100.3 D) Manufacturing 105.0 89.0 92.4 91.8 83.5 91.2 92.0 100.0 89.2 E) Electricity, gas and water supply 102.0 90.2 93.5 89.5 96.1 85.5 107.1 95.2 91.7 Source:BHAS Таble 4: RS Construction activity, indices Index period I-XII 2011 Baseline period Value of works performed, in 000 BAM 98.0 85.7 85.0 150.0 65.8 74.2 85.2 73.3 94.3 Number of workers on construction works 87.1 92.6 96.7 95.1 84.3 97.6 98.5 96.9 104.4 Worked effective hours on construction works 88.5 96.2 99.8 109.7 85.7 95.6 100.9 102.3 104.0 Source: RSIS Тable 5: RS Unemployment Category I-XII 2011 Number of the unemployed 150,344 155,509 154,159 154,850 155,787 155,890 154,479 152,349 151,596 Newly entered into the records 5,558 5,358 4,845 5,791 4,923 5,360 4,118 4,196 4,682 Total deleted from the records 4,693 4,277 4,915 4,065 3,648 5,119 5,268 6,194 5,198 Deleted from the records due to employment 2,042 1,937 2,455 1,671 1,499 2,640 2,963 3,359 2,598 Source: RSEI STATISTICAL ANNEX 12
Тable 6: Average RS net salary, by sector, in BAM Sectors I-XII 2011 Total 809 818 819 819 821 814 817 826 818 A Agriculture, hunting and forestry 604 597 606 625 590 582 605 600 637 B Fishing 616 590 597 574 601 595 600 610 607 C Mining and quarrying 988 1,003 1,017 975 1,048 981 1,007 1,071 1,012 D Manufacturing 572 576 580 587 573 569 579 580 591 E Electricity, gas and water supply 947 959 953 958 979 941 936 957 951 F Construction 589 580 582 605 572 567 585 578 591 G Wholesale and retail trade, repair of motor vehicles, motorcycles and personal and household goods 605 612 605 619 609 609 603 595 598 H Hotels and restaurants 549 545 553 541 559 536 549 562 573 I Transport, storage and communication 793 753 777 642 804 786 797 805 793 J Financial intermediation 1,252 1,240 1,274 1,192 1,240 1,272 1,294 1,344 1,275 K Real estate, renting and business activities 635 639 632 649 641 629 631 628 617 L Public administration and defence, compulsory social security 1,063 1,091 1,088 1,088 1,099 1,087 1,078 1,093 1,081 M Education 883 875 875 888 859 878 891 892 839 N Health and social work 1,031 1,040 1,043 1,043 1,055 1,022 1,037 1,034 1,065 O Other community, social and personal service activities 626 641 641 629 647 646 640 636 649 Source: RSIS Тable 7: Average BiH net salary, by sector, in BAM Sectors I-XII 2011 Total 816 822 825 826 818 823 823 836 822 A Agriculture, hunting and forestry 673 669 684 693 648 668 686 701 703 B Fishing 587 580 588 569 585 587 594 599 598 C Mining and quarrying 905 931 932 925 939 928 923 942 936 D Manufacturing 579 583 586 591 580 579 584 597 585 E Electricity, gas and water supply 1,146 1,166 1,160 1,176 1,159 1,161 1,137 1,190 1,138 F Construction 549 538 539 547 534 534 537 539 543 G Wholesale and retail trade, repair of motor vehicles, motorcycles and personal and household goods 570 576 577 576 574 579 578 581 576 H Hotels and restaurants 539 533 536 530 535 533 536 537 547 I Transport, storage and communication 897 904 911 894 901 916 906 941 908 J Financial intermediation 1,318 1,278 1,312 1,286 1,267 1,280 1,393 1,344 1,297 K Real estate, renting and business activities 719 729 716 735 738 714 713 693 707 L Public administration and defence, compulsory social security 1,140 1,144 1,142 1,146 1,140 1,146 1,139 1,141 1,141 M Education 856 854 856 854 850 859 861 867 844 N Health and social work 997 1,010 1,016 1,015 1,001 1,014 1,004 1,043 1,017 O Other community, social and personal service activities Source: BHAS 731 752 749 738 765 751 743 746 751 STATISTICAL ANNEX 13
Тable 8: Overview of inflation trend in RS, measured by Consumer Price Index- CPI Index period I-XII 2011 Baseline period Same period last year TOTAL 103.9 102.4 102.1 102.6 102.4 102.2 102.0 101.6 101.6 Food and non-alcoholic beverages 105.6 102.0 101.2 102.8 102.1 101.1 100.4 100.2 100.8 Alcoholic beverages and tobacco 108.0 108.8 108.7 108.8 108.9 108.6 109.1 108.4 108.4 Clothing and footwear 95.4 95.8 95.9 96.0 96.1 95.2 95.9 96.3 96.1 Housing, water, electricity, gas and other fuels 102.8 101.8 101.8 102.3 101.7 101.5 101.6 102.1 101.2 Furnishings, household equipment and routine maintenance of the house 101.1 102.2 102.0 101.7 102.2 102.6 102.0 101.8 101.8 Health care 99.0 98.8 99.4 98.6 98.7 99.2 99.7 100.0 100.3 Transport 108.1 107.4 106.5 106.9 107.2 108.2 107.6 105.1 104.0 Communications 110.3 104.3 104.2 104.2 104.2 104.3 104.3 104.2 104.2 Recreation and culture 100.3 99.8 99.8 99.8 99.8 99.9 100.0 99.7 99.4 Education 99.8 100.1 100.1 100.1 100.1 100.1 100.1 100.1 100.1 Restaurants and hotels 100.7 100.6 100.4 100.7 100.6 100.4 100.3 100.2 100.2 Other goods and services 99.5 99.9 100.3 99.8 99.9 100.1 100.5 100.5 100.8 Source: RSIS Tаble 9: Lending interest rates in RS, in % Category I-XII 2011 Interest rates on short term loans 7.75 7.25 7.26 7.33 7.21 7.21 7.33 7.29 7.20 Interest rates on long term loans 7.9 7.96 7.97 7.75 8.40 7.78 7.56 9.25 7.42 Total loans 7.82 7.57 7.56 7.56 7.78 7.38 7.41 8.08 7.30 Source: BARS Таble 10: Lending interest rates in BiH, in % Category XII 2011 I II III IV V VI STATISTICAL ANNEX Interest rates on short-term loans to private companies 7.18 7.05 7.02 6.94 7.04 7.13 6.91 Interest rates on short-term loans to individuals 9.71 10.19 10.24 10.09 10.00 10.04 10.00 Interest rates on long-term loans to private companies 7.48 8.28 7.80 7.71 7.26 7.79 7.99 Interest rates on long-term loans to individuals 8.49 8.47 9.02 8.58 8.46 8.08 8.03 Source:CBBH 14
Table 11: RS and BiH Foreign Trade, in 000 BAM Republic of Srpska I-XII 2011 Export 2,561,928 533,810 1,180,008 158,362 161,327 214,153 204,813 227,243 214,234 Import 4,584,193 1,007,340 2,143,929 290,622 242,661 474,071 372,397 382,972 381,176 Trade volume 7,146,121 1,541,150 3,323,937 448,984 403,988 688,224 577,210 610,215 595,410 Trade balance -2,022,265-473,530-963,921-132,260-81,334-259,918-167,584-155,730-166,942 Export-import ratio, in % 55.9 53.0 55.0 54.5 66.5 45.2 55.0 59.3 56.2 Bosnia and Herzegovina I-XII 2011 Export 8,222,112 1,763,875 3,868,621 559,907 522,849 681,118 656,104 706,855 741,788 Import 15,525,428 3,407,755 7,331,720 997,715 940,007 1,470,033 1,314,881 1,315,430 1,293,654 Trade volume 23,747,540 5,171,630 11,200,341 1,557,622 1,462,856 2,151,151 1,970,985 2,022,285 2,035,442 Trade balance -7,303,316-1,643,880-3,463,099-437,808-417,158-788,915-658,777-608,575-551,866 Export-import ratio, in % 53.0 51.8 52.8 56.1 55.6 46.3 49.9 53.7 57.3 Source: RSIS and BHAS Prepared by: Published: Оctober IRBRS Macroeconomic Analysis Division Data used in this publication were taken mostly from external sources. The Republic of Srpska Investment-Development Bank is unable to accept any responsibility whatsoever for the accuracy of this data or for the consequences of any reliance which may be placed upon the use of the information it contains. STATISTICAL ANNEX Copyright (c) The Republic of Srpska Investment-Development Bank. All rights reserved. 15