Economy Overview
Bosnia has a transitional economy with limited market reforms. The economy relies heavily on the export of metals 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 interethnic warfare in Bosnia and Herzegovina 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 but slowed in 2000-02 and picked up again during 2003-08, when GDP growth exceeded 5% per year. However, the country experienced a decline in GDP of nearly 3% in 2009 reflecting local effects of the global economic crisis. GDP has stagnated since then. Foreign banks, primarily from Austria and Italy, now control most of the banking sector. 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. Bosnia's private sector is growing, but foreign investment has dropped off sharply since 2007. Government spending, at roughly 50% of GDP, remains high because of redundant government offices at the state, entity and municipal level. Privatization of state enterprises has been slow, particularly in the Federation, where political division between ethnically-based political parties makes agreement on economic policy more difficult. High unemployment remains the most serious macroeconomic problem. Successful implementation of a value-added tax in 2006 provided a predictable source of revenue for the government and helped rein in gray-market activity. National-level statistics have also improved over time but a large share of economic activity remains unofficial and unrecorded. Bosnia and Herzegovina became a full member of the Central European Free Trade Agreement in September 2007. Bosnia and Herzegovina's top economic priorities are: acceleration of integration into the EU; strengthening the fiscal system; public administration reform; World Trade Organization (WTO) membership; and securing economic growth by fostering a dynamic, competitive private sector. In 2009, Bosnia and Herzegovina was granted an International Monetary Fund (IMF) stand-by arrangement, necessitated by sharply increased social spending and a fiscal crisis exacerbated by the global economic downturn. Disbursement of IMF aid was suspended in 2011 after a parliamentary deadlock left Bosnia without a state-level government for over a year. The IMF concluded a new stand-by arrangement with Bosnia in October 2012, with the first tranches paid in November and December 2012.
Agriculture Products
wheat, corn, fruits, vegetables; livestock
Industrial Production Growth Rate
3.1% (2011 est.)country comparison to the world: 97
Labor Force
2.6 million (2010 est.)country comparison to the world: 109
Unemployment Rate
43.3% (2011 est.)country comparison to the world: 189 43.1% (2010 est.) note: official rate; actual rate is lower as many technically unemployed persons work in the gray economy
Population Below Poverty Line
18.6% (2007 est.)
Household Income or Consumption by Percentage Share
Lowest 10%: 2.7%
Highest 10%: 27.3% (2007)
Distribution of Family Income Gini Index
36.2 (2007)country comparison to the world: 83
Budget
Revenues: $7.887 billion
Expenditures: $8.521 billion (2012 est.)
Public Debt
43.8% of GDP (2012 est.)country comparison to the world: 80 40.6% of GDP (2011 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.
Commercial Bank Prime Lending Rate
Stock of Narrow Money
$4.088 billion (31 December 2012 est.)country comparison to the world: 107 $4.092 billion (31 December 2011 est.)
Stock of Broad Money
$9.577 billion (31 December 2012 est.)country comparison to the world: 109 $9.538 billion (31 December 2011 est.)
Stock of Domestic Credit
$10.34 billion (31 December 2012 est.)country comparison to the world: 96 $10.13 billion (31 December 2011 est.)
Market Value of Publicly Traded Shares
$NA
Reserves of Foreign Exchange and Gold
$3.9 billion (31 December 2012 est.)country comparison to the world: 98 $4.15 billion (31 December 2011 est.)
Debt External
$9.051 billion (31 December 2012 est.)country comparison to the world: 98 $8.764 billion (31 December 2011 est.)
Stock of Direct Foreign Investment at Home
Stock of Direct Foreign Investment Abroad
Exchange Rates
konvertibilna markas (BAM) per US dollar -1.533 (2012 est.) 1.407 (2011 est.) 1.4767 (2010 est.) 1.4079 (2009) 1.3083 (2008)
