Bosnia and Herzegovina: Economy#
Bosnia has a transitional economy with limited market reforms. The economy relies heavily on the export of metals, energy, textiles, and furniture as well as on remittances and foreign aid. A highly decentralized government hampers economic policy coordination and reform, while excessive bureaucracy and a segmented market discourage foreign investment. Foreign banks, primarily from Austria and Italy, now control most of the banking sector. The konvertibilna marka (convertible mark or BAM) - the national currency introduced in 1998 - is pegged to the euro, and confidence in the currency and the banking sector has remained stable.Interethnic warfare in Bosnia and Herzegovina caused production to plummet by 80% from 1992 to 1995 and unemployment to soar, but the economy made progress until 2008, when the global economic crisis caused a downturn. Bosnia and Herzegovina became a full member of the Central European Free Trade Agreement in September 2007.
Bosnia's private sector is growing slowly, but foreign investment has dropped sharply since 2007. Government spending - including transfer payments - remains high, at roughly 40% of GDP, because of redundant government offices at the national, sub-national, and municipal level. High unemployment remains the most serious macroeconomic problem. Successful implementation of a value-added tax in 2006 provided a steady source of revenue for the government and helped rein in gray-market activity. National-level statistics have also improved over time but a large share of economic activity remains unofficial and unrecorded.
Bosnia and Herzegovina's top economic priorities are: acceleration of integration into the EU; strengthening the fiscal system; public administration reform; World Trade Organization membership; and securing economic growth by fostering a dynamic, competitive private sector.
Economic Facts#
| GDP (purchasing power parity) | $42.53 billion (2016 est.) $41.29 billion (2015 est.) $40.03 billion (2014 est.) note: data are in 2016 dollars |
|---|---|
| GDP (official exchange rate) | $16.53 billion (2015 est.) |
| GDP - real growth rate | 3% (2016 est.) 3.2% (2015 est.) 1.1% (2014 est.) |
| GDP - per capita (PPP) | $11,000 (2016 est.) $10,700 (2015 est.) $10,300 (2014 est.) note: data are in 2016 dollars |
| Gross national saving | 12% of GDP (2016 est.) 10.5% of GDP (2015 est.) 10.3% of GDP (2014 est.) |
| GDP - composition, by end use | household consumption: 80.9% government consumption: 21.5% investment in fixed capital: 18.6% investment in inventories: 0% exports of goods and services: 32.8% imports of goods and services: -55.1% (2016 est.) |
| GDP - composition, by sector of origin | agriculture: 7.8% industry: 26.8% services: 65.4% (2016 est.) |
| Agriculture - products | wheat, corn, fruits, vegetables; livestock |
| Industries | steel, coal, iron ore, lead, zinc, manganese, bauxite, aluminum, motor vehicle assembly, textiles, tobacco products, wooden furniture, ammunition, domestic appliances, oil refining |
| Industrial production growth rate | 4% (2016 est.) |
| Labor force | 1.48 million (2016 est.) |
| Labor force - by occupation | agriculture: 19% industry: 30% services: 51% (2013) |
| Unemployment rate | 43.2% (2015 est.) 43.2% (2015 est.) note: official rate; actual rate is lower as many technically unemployed persons work in the gray economy |
| Population below poverty line | 17.2% (2011 est.) |
| Household income or consumption by percentage share | lowest 10%: 2.7% highest 10%: 27.3% (2007) |
| Distribution of family income - Gini index | 36.2 (2007) |
| Budget | revenues: $7.681 billion expenditures: $7.975 billion (2016 est.) |
| Taxes and other revenues | 46.5% of GDP (2016 est.) |
| Budget surplus (+) or deficit (-) | -1.8% of GDP (2016 est.) |
| Public debt | 46.5% of GDP (2016 est.) 46.1% of GDP (2015 est.) note: data cover general government debt and include debt instruments issued (or owned) by government entities other than the treasury; the data include treasury debt held by foreign entities; the data include debt issued by subnational entities, as well as int |
| Fiscal year | calendar year |
| Inflation rate (consumer prices) | -0.8% (2016 est.) -1% (2015 est.) |
| Commercial bank prime lending rate | 5% (31 December 2016 est.) 5.79% (31 December 2015 est.) |
| Stock of narrow money | $5.008 billion (31 December 2016 est.) $4.554 billion (31 December 2015 est.) |
| Stock of broad money | $9.223 billion (31 December 2015 est.) $10.72 billion (31 December 2014 est.) |
| Stock of domestic credit | $9.367 billion (31 December 2016 est.) $9.389 billion (31 December 2015 est.) |
| Market value of publicly traded shares | $NA |
| Current account balance | -$847 million (2016 est.) -$901 million (2015 est.) |
| Exports | $3.93 billion (2016 est.) $3.95 billion (2015 est.) |
| Exports - commodities | metals, clothing, wood products |
| Exports - partners | Slovenia 16.5%, Italy 15.9%, Germany 12.1%, Croatia 11.5%, Austria 11.1%, Turkey 5.2% (2015) |
| Imports | $7.765 billion (2016 est.) $8.173 billion (2015 est.) |
| Imports - commodities | machinery and equipment, chemicals, fuels, foodstuffs |
| Imports - partners | Croatia 19.3%, Germany 13.9%, Slovenia 13.8%, Italy 10.9%, Austria 5.7%, Hungary 5.2%, Turkey 4.5% (2015) |
| Reserves of foreign exchange and gold | $4.8 billion (31 December 2016 est.) $4.791 billion (31 December 2015 est.) |
| Debt - external | $9.768 billion (31 December 2016 est.) $9.597 billion (31 December 2015 est.) |
| Stock of direct foreign investment - at home | $7.92 billion (2014 est.) $7.721 billion (2013 est.) |
| Stock of direct foreign investment - abroad | $0 (2014) |
| Exchange rates | konvertibilna markas (BAM) per US dollar - 1.806 (2016 est.) 1.7626 (2015 est.) 1.7626 (2014 est.) 1.4718 (2013 est.) 1.52 (2012 est.) |