EBRD - The European Bank for Reconstruction and Development estimated the damage from the devastating floods in Serbia and Bosnia and Herzegovina at around EUR 3 billion. "No official estimates as to the cost of this natural disaster are available as yet. However, some very rough preliminary estimates established the damage at around EUR 1.5-2 billion in Serbia, and about EUR 1.3 billion in Bosnia and Herzegovina," EBRD noted in a statement.

At mid May, the two Balkan countries suffered their worst flooding in history, with some 60 people killed in the disaster and well over a million affected by damage to housing, schools or hospitals, arable land or public infrastructure.

The agriculture sector, which accounts for about 10% of GDP in Serbia and 6% in Bosnia, has been particularly affected. "Most of the farm land in flooded areas has been destroyed and the damage in both countries could be in the hundreds of millions in Euros."

Damage to the energy sector is also likely to be costly, particularly in Serbia where the largest mining complex Kolubara - which produces more than 50% of the energy the Serbia needs, has been flooded.

At the same time, roads, railways, water supply and energy transmission infrastructure have been badly hit too, which will cause major problems for the free movement of goods and people and affect businesses across the region.

"The floods could also have a sizeable macro-economic impact on Serbia and Bosnia, affecting short-term growth and inflation as well as their policy priorities and the budget for this year," EBRD noted.

The current EBRD growth forecasts for 2014 are 1.8% for Bosnia and 1.0% for Serbia and they may well need to be revised further downwards, EBRD stated.

Read the full release here.