Bosnia and Herzegovina Economy - 2021

Economic overview

Bosnia and Herzegovina 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 economy is among the least competitive in the region. Foreign banks, primarily from Austria and Italy, control much of the banking sector, though the largest bank is a private domestic one. The konvertibilna marka (convertible mark) - the national currency introduced in 1998 - is pegged to the euro through a currency board arrangement, which has maintained confidence in the currency and has facilitated reliable trade links with European partners. Bosnia and Herzegovina became a full member of the Central European Free Trade Agreement in September 2007. In 2016, Bosnia began a three-year IMF loan program, but it has struggled to meet the economic reform benchmarks required to receive all funding installments.

Bosnia and Herzegovina's private sector is growing slowly, but foreign investment dropped sharply after 2007 and remains low. 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, though public perceptions of government corruption and misuse of taxpayer money has encouraged a large informal economy to persist. National-level statistics have 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.

Real GDP growth rate

3% (2017 est.)

3.2% (2016 est.)

3.1% (2015 est.)

Inflation rate (consumer prices)

1.2% (2017 est.)

-1.1% (2016 est.)

Credit ratings

Moody's rating: B3 (2012)

Standard & Poors rating: B (2011)

Real GDP (purchasing power parity)

$49.224 billion (2019 est.)

$47.94 billion (2018 est.)

$46.212 billion (2017 est.)

note: data are in 2010 dollars

GDP (official exchange rate)

$20.078 billion (2019 est.)

Real GDP per capita

$14,912 (2019 est.)

$14,423 (2018 est.)

$13,788 (2017 est.)

note: data are in 2010 dollars

Gross national saving

16.6% of GDP (2019 est.)

15.9% of GDP (2018 est.)

13.7% of GDP (2017 est.)

GDP - composition, by sector of origin

agriculture: 6.8% (2017 est.)

industry: 28.9% (2017 est.)

services: 64.3% (2017 est.)

GDP - composition, by end use

household consumption: 77.4% (2017 est.)

government consumption: 20% (2017 est.)

investment in fixed capital: 16.6% (2017 est.)

investment in inventories: 2.3% (2017 est.)

exports of goods and services: 38.7% (2017 est.)

imports of goods and services: -55.1% (2017 est.)

Ease of Doing Business Index scores

Overall score: 65.4 (2020)

Starting a Business score: 60 (2020)

Trading score: 95.7 (2020)

Enforcement score: 57.8 (2020)

Agricultural products

maize, milk, vegetables, potatoes, wheat, plums/sloes, apples, barley, cabbages, poultry

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

3% (2017 est.)

Labor force

806,000 (2020 est.)

Labor force - by occupation

agriculture: 18%

industry: 30.4%

services: 51.7% (2017 est.)

Unemployment rate

33.28% (2019 est.)

35.97% (2018 est.)

note: official rate; actual rate is lower as many technically unemployed persons work in the gray economy

Population below poverty line

16.9% (2015 est.)

Gini Index coefficient - distribution of family income

33 (2011 est.)

33.1 (2007)

Household income or consumption by percentage share

lowest 10%: 2.9%

highest 10%: 25.8% (2011 est.)

Budget

revenues: 7.993 billion (2017 est.)

expenditures: 7.607 billion (2017 est.)

Taxes and other revenues

44% (of GDP) (2017 est.)

Budget surplus (+) or deficit (-)

2.1% (of GDP) (2017 est.)

Public debt

39.5% of GDP (2017 est.)

44.1% of GDP (2016 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.

Fiscal year

calendar year

Current account balance

-$873 million (2017 est.)

-$821 million (2016 est.)

Exports

$8.843 billion (2019 est.)

$8.91 billion (2018 est.)

$8.395 billion (2017 est.)

Exports - partners

Germany 14%, Italy 12%, Croatia 11%, Serbia 11%, Austria 9%, Slovenia 8% (2019)

Exports - commodities

electricity, seating, leather shoes, furniture, insulated wiring (2019)

Imports

$12.561 billion (2019 est.)

$12.441 billion (2018 est.)

$11.999 billion (2017 est.)

Imports - partners

Croatia 15%, Serbia 13%, Germany 10%, Italy 9%, Slovenia 7%, China 6% (2019)

Imports - commodities

refined petroleum, cars, packaged medicines, coal, electricity (2019)

Reserves of foreign exchange and gold

$6.474 billion (31 December 2017 est.)

$5.137 billion (31 December 2016 est.)

Debt - external

$10.87 billion (31 December 2017 est.)

$10.64 billion (31 December 2016 est.)

Exchange rates

konvertibilna markas (BAM) per US dollar -

1.729 (2017 est.)

1.7674 (2016 est.)

1.7674 (2015 est.)

1.7626 (2014 est.)

1.4718 (2013 est.)