Information about Bosnia and Herzegovina
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Home > Country profiles > Economic and Political Outline
Bosnia and Herzegovina: Economic and Political Outline
Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline
Three years of inter-ethnic conflicts (1992-1995) destroyed a large part of Bosnia's economy and infrastructures. Bosnia and Herzegovina started its negotiations to become a member of the European Union in November 2005. Since then, a wide range of political, social and economic reforms have been accomplished, especially in the banking and tourism sectors. Its GDP has grown at a steady pace of 5% per year the last few years.
Nevertheless, corruption and the high level of unemployment are major hurdles to the country's economic development. In addition, agriculture was largely privatized, a fact that increased the net import of food products.
The global economic crisis did not spare the country, despite the small integration of the Bosnian economy into the international channels. The crisis drew attention to the frailty of public finance, manifested by the weight of public spending and the intensification of the current deficit caused by the reduction in transfers from the Bosnian diaspora all over the world. In July 2009, Bosnia and Herzegovina was granted a stand-by loan of EUR 1.2 billion by the IMF, for a three-year period on the "sine qua non" condition that the country must rehabilitate its public and social expenses. Unpopular measures were taken, such as the salary freeze of civil employees or the reduction of social benefits. Starting 2011, the development and progress of exports will allow the country to re-establish its economic plan.
| Main Indicators | 2009 | 2010 | 2011 | 2012 (e) | 2013 (e) |
| GDP (billions USD) | 17.05e | 16.53 | 18.34 | 19.39 | 20.63 |
| GDP (Constant Prices, Annual % Change) | -2.9 | 0.7 | 2.2 | 3.0 | 4.0 |
| GDP per Capita (USD) | 4,367 | 4,242e | 4,715 | 4,993 | 5,320 |
| General Government Gross Debt (in % of GDP) | 35.9 | 39.7e | 39.6e | 38.4 | 35.7 |
| Inflation Rate (%) | -0.4 | 2.1 | 4.0 | 2.5 | 2.5 |
| Unemployment Rate (% of the Labor Force) | 24.1 | 27.2 | 27.6 | 27.0 | 26.0 |
| Current Account (billions USD) | -1.06 | -0.92 | -1.14e | -1.08 | -1.10 |
| Current Account (in % of GDP) | -6.2 | -5.6e | -6.2 | -5.3 | - |
Source: IMF - World Economic Outlook Database ; World Bank , Last Available Data
Note: (e) Estimated Data
The main sectors that account for economic growth are services and light industry. However, the industry sector started to diminish at the end of 2008 and during 2009, due to the drop of the domestic and European demand.
The trading sector is the one that gathers the highest number of providers, followed by the manufacturing, business services, transport and construction industry sectors.
Bosnia and Herzegovina mainly produces metal products. Given the country's substantial resources, the wood industry ranks second in total exports. Other important production sectors are mineral and chemical products, machinery, mechanical appliances, textile and footwear.
| Breakdown of Economic Activity By Sector | Agriculture | Industry | Services |
| Value Added (in % of GDP) | 8.1 | 28.8 | 63.1 |
| Value Added (Annual % Change) | 0.5 | 0.5 | -4.3 |
Source: World Bank - Last Available Data.
Find more information about your business sector on our service Market reports.
| Monetary Indicators | 2006 | 2007 | 2008 | 2009 | 2010 |
| Bosnian Mark (BAM) - Average Annual Exchange Rate For 1 USD | 1.56 | 1.43 | 1.34 | 1.41 | 1.48 |
Source: World Bank - Last Available Data.
Find out all the exchange rates daily on our service Currency converter.
Distribution of Economic freedom in the world
Source: 2011 Index of Economic freedom, Heritage Foundation
See the Country Risk Analysis Provided By Ducroire.
The country is open to foreign trade and does not have any non-tariff trade barriers. The customs duties are relatively low for most of the products. Anti-dumping and compensatory duties are sometimes imposed to protect the local industry.
One of the main attractions of the country is the establishment of Free Trade Zones. Investors are free to invest capital in the Free Trade Zones, transfer their profits and re-transfer capital. Customs duties and tariffs are not payable on imports into these zones. Furthermore, equipment (except passenger vehicles, slot and gambling machines), which is imported as part of share capital is exempt from customs duties.
Bosnia and Herzegovina's trade balance is traditionally a deficit one. This trend is expected to continue in the coming years because of the effects of the crisis and especially because of the drop in industrial production in the EU, which had a negative effect on the local industries. However, exports (steel and aluminum) are increasing and this will allow the trade balance to recover in the next coming years.
| Foreign Trade Indicators | 2006 | 2007 | 2008 | 2009 | 2010 |
| Imports of Goods (million USD) | 7,345 | 9,720 | 12,189 | 8,773 | 9,223 |
| Exports of Goods (million USD) | 3,323 | 4,152 | 5,021 | 3,954 | 4,803 |
| Imports of Services (million USD) | 458 | 571 | 705 | 625 | 551 |
| Exports of Services (million USD) | 1,137 | 1,454 | 1,659 | 1,396 | 1,252 |
| Imports of Goods and Services (Annual % Change) | -10.7 | 16.6 | -1.9 | -4.5 | -3.9 |
| Exports of Goods and Services (Annual % Change) | 13.7 | 12.6 | 4.2 | -3.5 | 11.3 |
| Imports of Goods and Services (in % of GDP) | 67.1 | 73.3 | 69.4 | 58.0 | 62.3 |
| Exports of Goods and Services (in % of GDP) | 36.9 | 38.9 | 36.8 | 33.4 | 40.7 |
| Trade Balance (million USD) | -4,298 | -5,704 | -7,097 | -4,754 | -4,293 |
| Trade Balance (Including Service) (million USD) | -3,625 | -4,825 | -6,117 | -3,956 | -3,602 |
| Foreign Trade (in % of GDP) | 104.0 | 112.1 | 106.2 | 91.4 | 103.0 |
Source: WTO - World Trade Organization ; World Bank , Last Available Data
| Main Customers (% of Exports) |
2010 |
| Germany | 15.3% |
| Croatia | 15.1% |
| Serbia | 12.5% |
| Italy | 12.1% |
| Slovenia | 8.6% |
| Austria | 6.6% |
| Montenegro | 4.4% |
| Switzerland | 2.2% |
| Hungary | 1.8% |
| France | 1.2% |
| Turkey | 1.1% |
| Netherlands | 1.1% |
| Poland | 1.1% |
| Czech Republic | 1.1% |
| Macedonia | 1.0% |
| Romania | 1.0% |
| Morocco | 0.9% |
| Belgium | 0.8% |
| Spain | 0.7% |
| Sweden | 0.7% |
| See More Countries | 36.3% |
| Main Suppliers (% of Imports) |
2010 |
| Croatia | 15.1% |
| Serbia | 10.5% |
| Germany | 10.5% |
| Italy | 8.9% |
| Russia | 8.7% |
| Slovenia | 5.9% |
| China | 4.8% |
| Austria | 3.6% |
| United States | 3.6% |
| Hungary | 3.1% |
| Turkey | 2.8% |
| Czech Republic | 2.0% |
| France | 2.0% |
| Brazil | 1.9% |
| Poland | 1.8% |
| Greece | 1.2% |
| Spain | 1.1% |
| Macedonia | 1.0% |
| Romania | 1.0% |
| Netherlands | 0.9% |
| See More Countries | 46.3% |
Source: Comtrade, Last Available Data
Source: Comtrade, Last Available Data
To go further, check out our service Import export flows.
Governmental function is performed by the Council of Ministers of BiH. After a new structure has been defined in 2002 by the High Representative, the Council of Ministers of BiH has nine members: Chairman, two Vice Chairmen being at the same time ministers, plus other six ministers. Chairman and members of the Council of Ministers hold a four year mandate. Each minister has a deputy. The function of the Secretary of the ministry has also been introduced. Candidates are elected to these functions in line with ethnic criterium in order to avoid that these functions are performed by representatives of only one or only two nationalities.
Presidency of BiH appoints the Chairman of the Council of Ministers, who takes over the duties after the House of Representatives of the Parliamentary Assembly of BiH confirms appointment. Chairperson proposes candidates for ministers, to be appointed by the House of Representatives. Bosnia and Herzegovina has nine ministries covering the following areas: foreign affairs, foreign trade and economic relations, civil affairs, finance and treasury, human rights and reffugees, justice, communications and transport, security, defense.
Head of Government is Chairman of the Council of Ministers, appointed by the Chief of State and approved by the Parliamentary Assembly of BiH in 2006: Mr. Nikola Spiric.
Source: Worldwide Press Freedom Index 2011, Reporters Without Borders
Map of freedom 2010
Source: Freedom House
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