This report covers the main macroeconomic releases from October 1 until October 30, 2016 as well as the financial and political events that took place in Bosnia & Herzegovina during this period. European Union foreign ministers called on October 17 for Bosnia & Herzegovina to focus on improving the functioning of its judicial institutions and to step up the fight against terrorism and organised crime. Milorad Dodik, the president of Bosnia’s Serb-dominated entity Republika Srpska, and the Croat representative in the Bosnian tripartite presidency, Dragan Covic, secretly support each other with the mutual aim of breaking up Bosnia & Herzegovina, former Croatian President Stjepan Mesic has claimed. Bosnia & Herzegovina’s election body, CIK, confirmed on October 17 that Srebrenica will have its first Serb mayor since the end of the 1992-1995 Bosnian war. Mladen Grujicic, the candidate of all Serb parties in Srebrenica, won the mayoral seat in the October 2 local elections, gaining 54.38% of the votes. Bosniak candidate Camil Durakovic, who was Srebrenica’s mayor until the elections, came second with 45.45% support. Bosnia & Herzegovina’s economy grew by 1.4% y/y in the second quarter of 2016, slowing from a revised 1.9% annual increase in the previous three months. The Energy Community has not extended the sanctions against Bosnia & Herzegovina that were imposed last year due to the country’s failure to adopt the Second Energy Package in the gas sector, Foreign Trade Minister Mirko Sarovic said. Key points: • CPI deflation slightly eased to 1/% y/y in September • The working-day adjusted industrial production increased by 3.6% y/y in September • The foreign trade gap narrowed 3.2% y/y to BAM4.95bn (€2.53bn) in the first nine months of 2016