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. The interethnic warfare in Bosnia and Herzegovina caused production to plummet by 80% from 1992 to 1995 and unemployment to soar. With an uneasy peace in place, output recovered in 1996-99 but slowed in 2000-02 and picked up again during 2003-08, when GDP growth exceeded 5% per year. However, the country declined in 2009 reflecting local effects of the global economic crisis. GDP growth contracted again in 2012, but posted a small gain in 2013. 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. 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 state, entity and municipal level. Privatization of state enterprises has been slow, particularly in the Federation, where political division between ethnically-based political parties makes agreement on economic policy more difficult. 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 became a full member of the Central European Free Trade Agreement in September 2007. Bosnia and Herzegovina's top economic priorities are: acceleration of integration into the EU; strengthening the fiscal system; public administration reform; World Trade Organization (WTO) membership; and securing economic growth by fostering a dynamic, competitive private sector. In 2009, Bosnia and Herzegovina was granted an International Monetary Fund (IMF) stand-by arrangement, necessitated by sharply increased social spending and a fiscal crisis exacerbated by the global economic downturn. Disbursement of IMF aid was suspended in 2011 after a parliamentary deadlock left Bosnia without a state-level government for over a year. The IMF concluded a new stand-by arrangement with Bosnia in October 2012 which aims to improve national policy coordination, continue fiscal contraction, improve crisis preparedness, and create an environment conducive to private sector development.

Economic Facts#

GDP (purchasing power parity)$32.16 billion (2013 est.)
$31.9 billion (2012 est.)
$32.26 billion (2011 est.)
note: data are in 2013 US dollars
GDP - real growth rate0.8% (2013 est.)
-1.1% (2012 est.)
1% (2011 est.)
GDP - per capita (PPP)$8,300 (2013 est.)
$8,200 (2012 est.)
$8,300 (2011 est.)
note: data are in 2013 US dollars
GDP - composition, by sector of originagriculture: 8.1%
industry: 26.4%
services: 65.5% (2013 est.)
Population below poverty line18.6% (2007 est.)
Household income or consumption by percentage sharelowest 10%: 2.7%
highest 10%: 27.3% (2007)
Labor force - by occupationagriculture: 18.9%
industry: 29.8%
services: 51.3% (2013)
Exports - commoditiesmetals, clothing, wood products
Exports - partnersGermany 15.6%, Croatia 14.2%, Italy 12.1%, Serbia 9.1%, Austria 8.2%, Slovenia 8.1% (2012 est.)
Agriculture - productswheat, corn, fruits, vegetables; livestock
Budgetrevenues: $7.691 billion
expenditures: $7.497 billion (2013 est.)
Imports - commoditiesmachinery and equipment, chemicals, fuels, foodstuffs
Imports - partnersGermany 11.4%, Russian Federation 9.9%, Serbia 9.8%, Italy 9.7%, China 6%, Slovenia 5%, Croatia 12.8% (2012 est.)
Exchange rateskonvertibilna markas (BAM) per US dollar -
1.42 (2013 est.)
1.52 (2012 est.)
1.4767 (2010 est.)
1.4079 (2009)
1.3083 (2008)
Exports$5.687 billion (2013 est.)
$5.161 billion (2012 est.)
Debt - external$11.14 billion (31 December 2013 est.)
$10.81 billion (31 December 2012 est.)
Fiscal yearcalendar year
Imports$10.3 billion (2013 est.)
$10.02 billion (2012 est.)
Industrial production growth rate11.7% (2013 est.)
Industriessteel, coal, iron ore, lead, zinc, manganese, bauxite, aluminum, motor vehicle assembly, textiles, tobacco products, wooden furniture, ammunition, domestic appliances, oil refining
Inflation rate (consumer prices)0.2% (2013 est.)
1.8% (2012 est.)
Labor force1.49 million (2012 est.)
Unemployment rate44.3% (2013 est.)
44.1% (2012 est.)
note: official rate; actual rate is lower as many technically unemployed persons work in the gray economy
Distribution of family income - Gini index36.2 (2007)
Public debt45.9% of GDP (2013 est.)
42.9% of GDP (2012 est.)
note: data cover general government debt, and includes 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 intra-governmental debt; intra-governmental debt consists of treasury borrowings from surpluses in the social funds, such as for retirement, medical care, and unemployment; debt instruments for the social funds are not sold at public auctions.
Current account balance-$939.5 million (2013 est.)
$1.639 billion (2012 est.)
Reserves of foreign exchange and gold$5.002 billion (31 January 2014 est.)
$4.852 billion (31 January 2013 est.)
GDP (official exchange rate)$18.87 billion (2013 est.)
Stock of direct foreign investment - at home$7.721 billion
$7.58 billion
Market value of publicly traded shares$NA
Commercial bank prime lending rate6.73% (31 December 2013 est.)
6.8% (31 December 2012 est.)
Stock of domestic credit$11 billion (31 December 2013 est.)
$10.82 billion (31 December 2012 est.)
Stock of narrow money$4.493 billion (31 December 2013 est.)
$4.122 billion (31 December 2012 est.)
Stock of broad money$10.8 billion (31 December 2013 est.)
$10.21 billion (31 December 2012 est.)
Taxes and other revenues40.8% of GDP (2013 est.)
Budget surplus (+) or deficit (-)1% of GDP (2013 est.)
GDP - composition, by end usehousehold consumption: 82.1%
government consumption: 22.1%
investment in fixed capital: 17.7%
investment in inventories: 1.5%
exports of goods and services: 29%
imports of goods and services: -52.4%
(2012 est.)
Gross national saving8.6% of GDP (2013 est.)
6.3% of GDP (2012 est.)
6.4% of GDP (2011 est.)