The economy of Bosnia and Herzegovina (BiH) continues to recover. Growth was 3.2 percent in 2015, despite fiscal consolidation forced by financing constraints, and is expected to be at about the same level this year. External and internal imbalances have eased substantially in the past year. However, since the global financial crisis, economic convergence with advanced European economies has lagged. Unemployment, especially among the youth, is high and persistent, and creates incentives for emigration. There are important challenges in the areas of improving the business environment, reorienting fiscal policy to support growth while ensuring sustainability, promoting credit while safeguarding financial stability, and ensuring the fragmented governance structure does not affect the single economic space.