This paper discusses Bosnia and Herzegovina's Fifth Review Under the Stand-by Arrangement and Requests for Waivers of Applicability and Extension and Augmentation of the Arrangement. Policy implementation remains strong despite a challenging environment. All end-September 2013 performance criteria (PCs) and indicative targets were met. A modest recovery in economic activity continues, supported by strong exports. Growth is estimated to have reached close to 1 percent in 2013 and is projected to pick up further in 2014 in line with developments in Europe. The banking sector is broadly stable but remains burdened by rising nonperforming loans.