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flag Bosnia and Herzegovina Bosnia and Herzegovina: Economic and Political Outline

Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline

Economic Indicators

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 2009201020112012 (e)2013 (e)
GDP (billions USD) 17.05e16.5318.3419.3920.63
GDP (Constant Prices, Annual % Change) -2.90.72.23.04.0
GDP per Capita (USD) 4,3674,242e4,7154,9935,320
General Government Gross Debt (in % of GDP) 35.939.7e39.6e38.435.7
Inflation Rate (%) -0.42.14.02.52.5
Unemployment Rate (% of the Labor Force) 24.127.227.627.026.0
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

Main Sectors of Industry

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 20062007200820092010
Bosnian Mark (BAM) - Average Annual Exchange Rate For 1 USD 1.561.431.341.411.48

Source: World Bank - Last Available Data.

 

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Learn more about Market Analysis about Bosnia and Herzegovina on Globaltrade.net, the Directory for International Trade Services.
 

Indicator of Economic Freedom

Score:
57.5/100
Position:
Mostly unfree
World Rank:
99/179
Regional Rank:
38/42

Distribution of Economic freedom in the world
Source: 2011 Index of Economic freedom, Heritage Foundation

 

Country Risk

See the Country Risk Analysis Provided By Ducroire.

 

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Foreign Trade in Figures

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 20062007200820092010
Imports of Goods (million USD) 7,3459,72012,1898,7739,223
Exports of Goods (million USD) 3,3234,1525,0213,9544,803
Imports of Services (million USD) 458571705625551
Exports of Services (million USD) 1,1371,4541,6591,3961,252
Imports of Goods and Services (Annual % Change) -10.716.6-1.9-4.5-3.9
Exports of Goods and Services (Annual % Change) 13.712.64.2-3.511.3
Imports of Goods and Services (in % of GDP) 67.173.369.458.062.3
Exports of Goods and Services (in % of GDP) 36.938.936.833.440.7
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) 104.0112.1106.291.4103.0

Source: WTO - World Trade Organization ; World Bank , Last Available Data

 

Main Partner Countries

Main Customers
(% of Exports)
2010
Germany 15.3%
Croatia 15.1%
Serbia 12.5%
Italy 12.1%
Slovenia 8.6%
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%
See More Countries 46.3%

Source: Comtrade, Last Available Data

 

Main Products

Main Exports
(% of Exports)
2010
Electrical energyElectrical energy 6.8%
Seats, whether or not convertible into beds, and...Seats, whether or not convertible into beds, and parts thereof, n.e.s. (excl. medical, surgical, dental or veterinary of heading 9402) 6.4%
Unwrought aluminiumUnwrought aluminium 6.0%
Coke and semi-coke of coal, of lignite or of peat,...Coke and semi-coke of coal, of lignite or of peat, whether or not agglomerated; retort carbon 4.1%
Footwear with outer soles of rubber, plastics,...Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of leather (excl. orthopaedic footwear, skating boots with ice or roller skates attached, and toy footwear) 3.1%
See More Products 73.5%
Main Imports
(% of Imports)
2010
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals, crude 6.8%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 5.8%
Coal; briquettes, ovoids and similar solid fuels...Coal; briquettes, ovoids and similar solid fuels manufactured from coal 3.3%
Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702) 2.8%
Medicaments consisting of mixed or unmixed...Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses "incl. those in the form of transdermal administration" or in forms or packings for retail sale (excl. goods of heading 3002, 3005 or 3006) 2.6%
See More Products 78.6%

Source: Comtrade, Last Available Data

 
 

To go further, check out our service Import export flows.

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Sources of General Economic Information

Ministries
Ministry of Finance
Ministry of Energy, Mining and Industry
Ministry of Environment and Tourism
Ministry of Trade
Ministry of Agriculture, Water management and Forestry
Ministry of development, entrepreneurship and craft
Statistical Office
Federal Office of Statistics
Central Bank
Central Bank of Bosnia and Herzegovina
Stock Exchange
The Sarajevo Stock Exchange
Banja Luka Stock Exchange
Search Engines
Pogodak (in local language only)
Bosna Online (in local language only)
Economic Portals
Capital market portal

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Political Outline

Executive Power
The function of the collective head of the state is perfomed by the Presidency of Bosnia and Herzegovina. Presidency is comprised of three members, i.e. one Bosniac, one Croat and one Serb. Members of the Presidency, Croat and Bosniac candidates from the Federation of BiH and Serb candidate from the Republika Srpska, are elected by direct elections, for a period of four years. Chairmanship in the Presidency is rotated every eight months.

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.

Legislative Power
Parliamentary Assembly is the highest legislative authority in BiH. It comprises the House of Representatives and the House of Peoples. All legislative decisions are made  by adoption in both houses of the Parliamentary Assembly of BiH.

House of Representatives has 42 members, two-thirds being elected from the Federation of Bosnia and Herzegovina and one–third from the Republika Srpska.

House of Peoples has 15 delegates, two-thirds coming from the Federation of Bosnia and Herzegovina (five Croats and five Bosniacs) and one–third from the Republika Srpska (five Serbs).
Main Political Parties
The main parliamentary parties are as follows: Democratic Action Party (SDA), Party for Bosnia and Herzegovina (SBIH), Alliance of Independent Social Democrats (SNSD), Social Democratic Party (SDP), Croatian Democratic Community (HDZ-HNZ), Serb Democratic Party (SDS), Coalition of the Croat Union.
Current Political Leaders
Chief of State: Mr. Zeljko Komsic (Croat).

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.

Next Election Dates
Next presidential and parliamentary elections will be held in October 2014.
 

Indicator of Freedom of the Press

World Rank:
59/179
Evolution:
12 places down compared to 2010

Source: Worldwide Press Freedom Index 2011, Reporters Without Borders

 

Indicator of Political Freedom

Ranking:
Partly Free
Political Freedom:
4/7
Civil Liberties:
3/7

Map of freedom 2010
Source: Freedom House

 

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