Bosnia and Herzegovina flag

The Economy of Bosnia and Herzegovina

Bosnian, Herzegovinian Economy

Bosnia and Herzegovina's map

Economy - overview: 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 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 2003-08 when GDP growth exceeded 5% per year. 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. 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 and foreign investment is slowly increasing, but government spending, at nearly 40% of adjusted GDP, remains high because of redundant government offices at the state, entity and municipal level. Implementing privatization, however, has been slow, particularly in the Federation where political division between ethnically-based political parties makes agreement on economic policy more difficult. A sizeable current account deficit and high unemployment rate remain the two most serious macroeconomic problems. Successful implementation of a value-added tax in 2006 provided a predictable source of revenue for the government and helped bring 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's economy has been largely sheltered from the global financial downtown although key economic indicators have worsened. Key exporters in the metal, automobile and wood processing industries have reported a worsening performance and have announced layoffs and output reductions.

GDP:

GDP - real growth rate: 5.6% (2008 est.) 6.8% (2007 est.) 6.7% (2006 est.)

GDP - per capita:

GDP - composition by sector: agriculture: 10.2% industry: 23.9% services: 66% (2006 est.)

Population below poverty line:

Household income or consumption by percentage share: lowest 10%: 3.9% highest 10%: 21.4% (2001)

Distribution of family income - Gini index: 56.2 (2007)

Inflation rate (consumer prices):

Labor force: 1.196 million (2007)

Labor force - by occupation: agriculture: 19.8% industry: 32.6% services: 47.6% (2007)

Unemployment rate: 29% official rate; grey economy may reduce actual unemployment to 25-30% (2007 est.)

Budget: revenues: $8.607 billion expenditures: $8.962 billion (2008 est.)

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: 6.3% (2008 est.)

Electricity - production: 12.84 billion kWh (2006 est.)

Electricity - production by source:

Electricity - consumption: 8.501 billion kWh (2006 est.)

Electricity - exports: 5.123 billion kWh (2006 est.)

Electricity - imports: 3.015 billion kWh (2006 est.)

Oil - production: 0 bbl/day (2007 est.)

Oil - consumption: 27,590 bbl/day (2006 est.)

Oil - exports: 0 bbl/day (2005)

Oil - imports: 27,370 bbl/day (2005)

Oil - proved reserves: 0 bbl (1 January 2006 est.)

Natural gas - production: 0 cu m (2007 est.)

Natural gas - consumption: 400 million cu m (2006 est.)

Natural gas - exports: 0 cu m (2007 est.)

Natural gas - imports: 0 cu m (2005)

Natural gas - proved reserves: 0 cu m (1 January 2006)

Agriculture - products: wheat, corn, fruits, vegetables; livestock

Exports: $5.092 billion f.o.b. (2008 est.)

Exports - commodities: metals, clothing, wood products

Exports - partners: Croatia 21%, Slovenia 16.5%, Italy 16.1%, Germany 13.3%, Austria 9.6%, Hungary 5.7% (2007)

Imports: $11.94 billion f.o.b. (2008 est.)

Imports - commodities: machinery and equipment, chemicals, fuels, foodstuffs

Imports - partners: Croatia 24.7%, Slovenia 13.3%, Germany 13.1%, Italy 10.4%, Austria 7%, Turkey 6.5%, Hungary 5.4% (2007)

Debt - external: $8.353 billion (31 December 2008 est.)

Economic aid - recipient:

Currency:

Currency code:

Exchange rates: konvertibilna markas (BAM) per US dollar - 1.3083 (2008 est.), 1.4419 (2007), 1.5576 (2006), 1.5727 (2005), 1.5752 (2004) note: the convertible mark is pegged to the euro

Fiscal year: