For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.
Nowadays, Bosnia and Herzegovina is considered an upper-middle-income country, achieving great results since 1995, the year in which the inter-ethnic conflict that destroyed much of the Bosnian economy and infrastructure, increased unemployment and decreased production, came to an end. After contracting during the COVID-19 pandemic, the economy resumed its growth path and expanded by 7.5% in 2021. Growth continued in the first (5.8%) and the second (5.9%) quarters of 2022 led by consumption and investments, but the external shocks caused by the Russian invasion of Ukraine caused a slowdown in both domestic and foreign demand, resulting in an overall growth rate of 2.5% for the year. As domestic and external risks persist, the IMF forecasts a growth rate of around 2% this year and 3% in 2024.
The general government balance was negative by 0.2% of GDP in 2022; however, the public accounts of the country's three constituent entities (Central State, Federation of Bosnia and Herzegovina and Republika Srpska) are expected to improve in 2023, when the government budget should return into positive territory (1.2% of GDP). Similarly, the debt-to-GDP ratio returned around its pre-pandemic level (31.8% in 2022) and should follow a downward trend over the forecast horizon 2(9.3% and 27.9% this year and the next, respectively – IMF). The government does not have access to markets, but it receives financing from several multilateral institutions, including the EBRD and the EU Commission. Inflation reached double-digit rates in 2022 (10.5%) mostly due to the marked rise in energy prices, but showed signs of deceleration towards the end of the year. According to IMF’s estimates, it should gradually ease in 2023 (4.5%) and 2024 (3.5%).
Corruption and the high level of unemployment are major hurdles to the country's economic development. The unemployment rate stood at 17.3% in 2022 and is expected to remain stable over the forecast horizon. Addressing bottlenecks causing persistent long-term unemployment, such as enhancing formal labour market participation (especially for women) and reducing skills mismatches for youth will be key. The country’s GDP per capita (PPP) is low, estimated at USD 17,899 in 2022 by the IMF.
|Main Indicators||2020||2021||2022 (E)||2023 (E)||2024 (E)|
|GDP (billions USD)||20.23||23.65||25.48||28.49||29.95|
|GDP (Constant Prices, Annual % Change)||-3.0||7.4||3.8||2.0||3.0|
|GDP per Capita (USD)||5,800||6,794||7,338||8,224||8,669|
|General Government Balance (in % of GDP)||-2.6||0.6||1.3||0.2||0.1|
|General Government Gross Debt (in % of GDP)||36.0||34.4||29.6||27.6||27.3|
|Inflation Rate (%)||-1.1||2.0||14.0||6.0||3.0|
|Unemployment Rate (% of the Labour Force)||15.9||17.4||17.3||17.2||17.2|
|Current Account (billions USD)||-0.66||-0.56||-0.98||-1.21||-1.09|
|Current Account (in % of GDP)||-3.3||-2.4||-3.9||-4.3||-3.6|
Source: IMF – World Economic Outlook Database , Latest available data
Note: (e) Estimated Data
The agricultural sector accounts for 5.2% of the country’s GDP and nearly 18% of total employment (World Bank, latest data available), with corn, wheat, barley, fruits, vegetables, livestock and poultry being the main agricultural products. Bosnia and Herzegovina has approximately 2.2 million hectares of agricultural land (43.2% of its total land area - FAO), and most of the farms are small in size and family-owned. The country is still a net food importer. According to the latest figures from the national statistical office, Bosnia's Federation maize crop stood at 173,232 tonnes in 2022, down by 18% y-o-y, while tobacco production increased by 8% to 298 tonnes.
The industry sector represents 25.5% of GDP, employing around 32% of the workforce. Bosnia and Herzegovina mainly produces raw materials such as steel, coal, iron ore, lead, zinc and aluminium. Additionally, wood is a significant sector and export commodity. Other important production sectors are mineral and chemical products, machinery, mechanical appliances, textile and footwear. The overall value-added of the manufacturing sector is estimated at 14% of GDP (World Bank). Bosnia's industrial production recorded a yearly increase of 1.7% in 2022 according to figures from the national statistical office.
Lastly, the service sector contributes 54.9% of GDP and more than half of total employment. The most important service sector of the economy is trade, followed by business services, transport and construction. Tourism had been growing fast in recent years; nevertheless, the impact of the COVID-19-induced crisis was severe. In 2022, the sector has been recovering: a total of over 1.7 million foreign tourists visited Bosnia and Herzegovina last year, up by 86% y-o-y, while the number of domestic tourists increased by 32% on the year to 2 million. As per the latest figures by the European Banking Federation, 23 commercial banks operate in the country.
|Breakdown of Economic Activity By Sector||Agriculture||Industry||Services|
|Employment By Sector (in % of Total Employment)||18.0||31.7||50.3|
|Value Added (in % of GDP)||5.2||25.5||54.9|
|Value Added (Annual % Change)||-8.0||8.9||7.7|
Source: World Bank - Latest available data.
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|Bosnian Mark (BAM) - Average Annual Exchange Rate For 1 MUR||0.05||0.05||0.05||0.05||0.04|
Source: World Bank - Latest available data.
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The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.
Bosnia and Herzegovina is open to foreign trade and is expanding its global partner network. Its trade-to-GDP ratio is 97% (World Bank, latest data available), but trade development is still hampered by low productivity levels, limited access to finance and administrative barriers. Custom duties are relatively low for most products, but various non-tariff barriers are in place. Anti-dumping and countervailing duties are sometimes imposed to protect the local industry if the price of the merchandise is below the domestic market price or if it is subsidised. Bosnia and Herzegovina seeks to attract higher foreign investment through Free Trade Zones within the country that allow investors to invest capital in specific areas, transfer their profits and re-transfer capital. Customs duties and tariffs are not payable on imports into these zones. Furthermore, equipment (except passenger vehicles, slots and gambling machines) imported as part of share capital is exempt from customs duties. BiH is actively pursuing World Trade Organization membership. The country mainly imports mineral fuels (16.5%); nuclear reactors, boilers, machinery and mechanical appliances (7.2%); electrical machinery and equipment (5.8%); plastics (5.5%); and aluminium (5.4%). Exports are led by mineral fuels (9.9%); aluminium (8.8%); furniture (7.8%); articles of iron or steel (7.4%); and electrical machinery and equipment (7.2% - data national statistical agency 2022).
The country's main export partners in 2022 were Croatia, Germany, and Serbia, accounting for respectively 14.9%, 14.8% and 13.1% of total export; followed by Italy (11.1%) and Austria (9.5%). Its main suppliers were Italy (12.4%), Serbia (10.7%), Germany (10.5%), Croatia (9.9), and China (8.1% - data national statistical agency 2022). Overall, the EU is the biggest trading partner.
The country has a structural trade deficit: in 2021, the World Bank estimated the external balance on goods and services to be negative by 11.9% of GDP (from 13.9% one year earlier). In the same period, the Federation exported USD 8.6 billion worth of goods and USD 2.2 billion in services, importing USD 13 billion and 0.7 billion, respectively (data WTO). Figures from the national statistical office show that in 2022 exports increased by 25.9% (to BAM 17.9 billion), while imports rose at a faster pace (+32.6%), totalling BAM 28.6 billion.
|Foreign Trade Indicators||2017||2018||2019||2020||2021|
|Imports of Goods (million USD)||10,504||11,630||11,159||9,873||13,029|
|Exports of Goods (million USD)||6,402||7,182||6,578||6,152||8,614|
|Imports of Services (million USD)||563||722||758||511||693|
|Exports of Services (million USD)||1,876||2,281||2,343||1,306||2,250|
|Imports of Goods and Services (Annual % Change)||7.7||3.9||1.4||-13.4||20.5|
|Exports of Goods and Services (Annual % Change)||11.8||7.0||0.7||-15.8||24.6|
|Imports of Goods and Services (in % of GDP)||57.1||57.3||55.2||48.6||54.6|
|Exports of Goods and Services (in % of GDP)||40.9||42.6||40.6||34.7||42.7|
|Trade Balance (million USD)||-4,291||-4,536||-4,557||-3,660||-4,326|
|Trade Balance (Including Service) (million USD)||-2,940||-2,964||-2,957||-2,789||-2,778|
|Foreign Trade (in % of GDP)||98.0||99.9||95.8||83.2||97.2|
Source: WTO – World Trade Organisation ; World Bank , Latest Available Data
(% of Exports)
|See More Countries||35.8%|
(% of Imports)
|See More Countries||48.4%|
Source: Comtrade, Latest Available Data
|9.7 bn USD of products exported in 2022|
|Electrical energyElectrical energy||6.1%|
|Unwrought aluminiumUnwrought aluminium||4.9%|
|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)||3.5%|
|Structures and parts of structures "e.g., bridges...Structures and parts of structures "e.g., bridges and bridge-sections, lock-gates, towers, lattice masts, roofs, roofing frameworks, doors and windows and their frames and thresholds for doors, shutters, balustrades, pillars and columns", of iron or steel; plates, rods, angles, shapes, sections, tubes and the like, prepared for use in structures, of iron or steel (excl. prefabricated buildings of heading 9406)||3.5%|
|Insulated "incl. enamelled or anodised" wire,...Insulated "incl. enamelled or anodised" wire, cable "incl. coaxial cable" and other insulated electric conductors, whether or not fitted with connectors; optical fibre cables, made up of individually sheathed fibres, whether or not assembled with electric conductors or fitted with connectors||3.4%|
|See More Products||78.7%|
|15.4 bn USD of products imported in 2022|
|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||10.2%|
|Unwrought aluminiumUnwrought aluminium||4.0%|
|Coal; briquettes, ovoids and similar solid fuels...Coal; briquettes, ovoids and similar solid fuels manufactured from coal||3.2%|
|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)||2.9%|
|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)||2.0%|
|See More Products||77.7%|
Source: Comtrade, Latest Available Data
To go further, check out our service Import Export Flows.
|1.2 bn USD of services exported in 2020|
|Personal travelPersonal travel||29.79%|
|Education-related expenditureEducation-related expenditure||3.51%|
|Health-related expenditureHealth-related expenditure||0.36%|
|Business travelBusiness travel||6.70%|
|Air transportAir transport||2.50%|
|Information servicesInformation services||1.94%|
|Construction abroadConstruction abroad||6.90%|
|Telecommunications servicesTelecommunications services||3.22%|
|Postal and courier servicesPostal and courier services||0.28%|
|Other personal, cultural, and...Other personal, cultural, and recreational services||1.37%|
|Audiovisual and related servicesAudiovisual and related services||1.11%|
|Embassies and consulatesEmbassies and consulates||0.08%|
|Military units and agenciesMilitary units and agencies||0.01%|
|Miscellaneous business,...Miscellaneous business, professional, and technical services||1.22%|
|Advertising, market research,...Advertising, market research, and public opinion polling||0.58%|
|Agricultural, mining, and...Agricultural, mining, and on-site processing services||0.41%|
|Research and developmentResearch and development||0.17%|
|Merchanting and other trade-related...Merchanting and other trade-related services||0.13%|
|Other trade-related servicesOther trade-related services||0.13%|
|Operational leasing servicesOperational leasing services||0.10%|
|Freight insuranceFreight insurance||0.21%|
|Other direct insuranceOther direct insurance||0.03%|
|0.5 bn USD of services imported in 2020|
|Air transportAir transport||9.95%|
|Sea transportSea transport||2.71%|
|Personal travelPersonal travel||19.85%|
|Education-related expenditureEducation-related expenditure||9.76%|
|Health-related expenditureHealth-related expenditure||2.29%|
|Business travelBusiness travel||3.38%|
|Expenditure by seasonal and...Expenditure by seasonal and border workers||0.05%|
|Miscellaneous business,...Miscellaneous business, professional, and technical services||9.85%|
|Architectural, engineering,...Architectural, engineering, and other technical services||2.55%|
|Legal, accounting, management...Legal, accounting, management consulting, and public relations||2.24%|
|Legal servicesLegal services||1.17%|
|Business and management...Business and management consulting and public relations services||1.07%|
|Advertising, market research,...Advertising, market research, and public opinion polling||1.38%|
|Research and developmentResearch and development||0.05%|
|Merchanting and other trade-related...Merchanting and other trade-related services||3.33%|
|Other trade-related servicesOther trade-related services||3.33%|
|Operational leasing servicesOperational leasing services||0.33%|
|Telecommunications servicesTelecommunications services||6.47%|
|Postal and courier servicesPostal and courier services||0.95%|
|Construction abroadConstruction abroad||1.55%|
|Construction in the compiling...Construction in the compiling economy||0.38%|
|Freight insuranceFreight insurance||0.33%|
|Auxiliary servicesAuxiliary services||0.21%|
|Other direct insuranceOther direct insurance||0.17%|
|Audiovisual and related servicesAudiovisual and related services||0.95%|
|Embassies and consulatesEmbassies and consulates||1.24%|
|Other personal, cultural, and...Other personal, cultural, and recreational services||0.02%|
Source: United Nations Statistics Division, Latest Available Data
The Council of Ministers of Bosnia and Herzegovina is responsible for various government functions such as 'harmonising the constitutional relations of the Council of Ministers with the work of the President and parliamentary assembly'. After a new structure defined by the High Representative in 2002, the Council of Ministers of Bosnia and Herzegovina has a Chairman, two Vice-Chairmen also serving as ministers, plus other ministers. The Chairman and members of the Council of Ministers hold a four-year mandate, and 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 the ethnic criterion to ensure that all nationalities are represented.
The Chairman of the Presidency appoints the Chairman of the Council of Ministers, who takes over the duties after the House of Representatives of the Parliamentary Assembly of Bosnia and Herzegovina confirms the appointment. The Chairman of the Council of Ministers proposes candidates for ministers, to be appointed by the House of Representatives. The ministries cover the following areas: foreign affairs, foreign trade and economic relations, civil affairs, finance and treasury, human rights and refugees, justice, communications and transport, security and defence.
Republika Srpska's unicameral legislature is the National Assembly, formed by 83 members directly elected for four-year terms.
The leading international civil agency in Bosnia and Herzegovina is the Office of the High Representative, which is responsible for overseeing the implementation of the civil aspects of the Dayton Peace Agreement (1995). The High Representative - who is also the EU Special Representative - holds the ultimate authority in terms of the Peace Agreements' interpretation. The High Representative is authorised to pass laws, if considered necessary, remove officials that obstruct activities from their posts and coordinate activities with other international organisations.
The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).
The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.
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Latest Update: September 2023