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Economy Overview

Bosnia and Herzegovina ranked next to Macedonia as the poorest republic in the old Yugoslav federation. Although agriculture is almost all in private hands, farms are small and inefficient, and the republic traditionally is a net importer of food. The private sector is growing and foreign investment is slowly increasing, but government spending, at nearly 40% of adjusted GDP, remains unreasonably high. The interethnic warfare in Bosnia 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 at high percentage rates from a low base; but output growth slowed in 2000-02. Part of the lag in output was made up in 2003-06 when GDP growth exceeded 5% per year. National-level statistics are limited and do not capture the large share of black market activity. 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 increased. Implementing privatization, however, has been slow, particularly in the Federation, although it is increasing in the Republika Srpska. Banking reform accelerated in 2001 as all the Communist-era payments bureaus were shut down; foreign banks, primarily from Western Europe, now control most of the banking sector. A sizeable current account deficit and high unemployment rate remain the two most serious economic problems. On 1 January 2006 a new value-added tax (VAT) went into effect. The VAT has been successful in capturing much of the gray market economy and has developed into a significant and predictable source of revenues for all layers of government. The question of how to allocate revenue from VAT receipts is not completely resolved. Bosnia and Herzegovina became a member of the Central European Free Trade Agreement in December 2006. The country receives substantial reconstruction assistance and humanitarian aid from the international community but will have to prepare for an era of declining assistance.

Agriculture Products

wheat, corn, fruits, vegetables; livestock

Industries

steel, coal, iron ore, lead, zinc, manganese, bauxite, vehicle assembly, textiles, tobacco products, wooden furniture, tank and aircraft assembly, domestic appliances, oil refining

Industrial Production Growth Rate

5.5% (2003 est.)

Labor Force

1.026 million (2001)

Electricity production

12.22 billion kWh (2005)

Electricity Consumption

8.574 billion kWh (2005)

Electricity Exports

3.58 billion kWh (2005)

Electricity Imports

2.174 billion kWh (2005)

Unemployment Rate

45.5% official rate; grey economy may reduce actual unemployment to 25-30% (31 December 2004 est.)

Population Below Poverty Line

25% (2004 est.)

Household Income or Consumption by Percentage Share

Lowest 10%: NA%

Highest 10%: NA% (2001)

Distribution of Family Income Gini Index

26.2 (2001)

Budget

Revenues: $6.207 billion

Expenditures: $5.838 billion (2006 est.)

Public Debt

23.4% of GDP (2006 est.)

Commercial Bank Prime Lending Rate

Stock of Narrow Money

Stock of Broad Money

Stock of Domestic Credit

Market Value of Publicly Traded Shares

$NA

Reserves of Foreign Exchange and Gold

$3.372 billion (2006 est.)

Debt External

$6.51 billion (2006 est.)

Stock of Direct Foreign Investment at Home

Stock of Direct Foreign Investment Abroad

Exchange Rates

Exchange rates: konvertibilna maraka per US dollar - 1.5576 (2006), 1.5727 (2005), 1.5752 (2004), 1.7329 (2003), 2.0782 (2002)

Note: the convertible mark is pegged to the euro

Year	2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000

GDP Official Exchange Rate

$9.234 billion 2006 est.

Fiscal Year

calendar year

GDP Purchasing Power Parity

GDP (purchasing power parity)
$25.32 billion
note
Bosnia has

GDP Real Growth Rate

6.2% (2006 est.)

GDP Per Capital

$5,600 (2006 est.)

Gross National Saving

GDP Composition by end Use

GDP Composition by Sector of Origin

Agriculture
10.2%
Industry
23.9%
Services
66% (2006 est.)

Inflation Rate Consumer Prices

7.5% (2006 est.)

Current Account Balance

$-1.261 billion (2006 est.)

Exports

$3.382 billion f.o.b. (2006 est.)

Exports Partners

Croatia
19.6%
Slovenia
16.7%
Italy
15.4%
Germany
12.3%
Austria
8.7%
Hungary
5.3%

Exports Commodities

Metals, clothing, wood products

Imports

$7.618 billion f.o.b. (2006 est.)

Imports Partners

Croatia
24%
Germany
14.5%
Slovenia
13.2%
Italy
10%
Austria
5.9%
Hungary
5.2%

Imports Commodities

Machinery and equipment, chemicals, fuels, foodstuffs

Bosnia and Herzegovina