This report covers the main macroeconomic releases from January 6 until February 5, 2016 as well as the financial and political events that took place in Bosnia during this period. Bosnia & Herzegovina’s State Investigation and Protection Agency (SIPA) arrested Fahrudin Radoncic, the leader of the centre-right Alliance for a Better Future (SBB), on January 25. He was accused of influencing a witness to provide a false testimony in investigation conducted by Bosnian and Kosovo’s prosecutions against Naser Kelmendi. Radoncic was the second top politician arrested in January. Few weeks earlier, on January, the police arrested another SBB member, Bakir Dautbasic, a secretary at the security ministry and a candidate for transport minister, on the same accusations. Bosnia needs to adjust its Stabilisation and Association Agreement (SAA) with Croatia’s entry in the bloc and to set up working mechanisms for coordination with the EU in order to file a credible application for European Union membership, according to Johannes Hahn, EU commissioner in charge of European neighbourhood policy and enlargement negotiations. Although Bosnia has renewed its commitment with the Energy Community, the country still needs to transform its good intentions into specific reforms, according to the organisation’s latest report. Key points: • CPI deflation softened to 1.3% y/y in December • The working-day adjusted industrial production rose by 1.8% y/y in December • The foreign trade gap narrowed 8.7% y/y6.9 in 2015