In more than 90 countries

Bosnia and Herzegovina

Economic Overview

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 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 24.5226.9528.7430.5732.43
GDP (Constant Prices, Annual % Change)
GDP per Capita (USD) 7,0607,7788,3178,8749,438
General Government Balance (in % of GDP) 0.4-1.3-1.5-1.1-0.8
General Government Gross Debt (in % of GDP) 29.728.628.228.128.5
Inflation Rate (%) n/a5.
Unemployment Rate (% of the Labour Force) 15.415.315.315.215.2
Current Account (billions USD) -1.10-1.16-1.09-1.12-1.22
Current Account (in % of GDP) -4.5-4.3-3.8-3.7-3.7

Source: IMF – World Economic Outlook Database , October 2021

Country Risk

See the country risk analysis provided by La Coface.



Main Sectors of Industry

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) 11.3 34.3 54.4
Value Added (in % of GDP) 4.7 25.2 53.7
Value Added (Annual % Change) -2.3 0.5 5.2

Source: World Bank - Latest available data.

Monetary Indicators 20162017201820192020
Bosnian Mark (BAM) - Average Annual Exchange Rate For 1 USD 1.771.741.661.701.72

Source: World Bank - Latest available data.



Foreign Trade

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 Values 20182019202020212022
Imports of Goods (million USD) 11,63011,1599,87313,02915,377
Exports of Goods (million USD) 7,1826,5786,1558,6149,674
Imports of Services (million USD) 735773558726905
Exports of Services (million USD) 2,3072,3731,4282,2752,838

Source: World Trade Organisation (WTO) ; Latest available data

Foreign Trade Indicators 20182019202020212022
Foreign Trade (in % of GDP) 98.494.582.196.1107.1
Trade Balance (million USD) -4,536-4,557-3,660-4,326-5,453
Trade Balance (Including Service) (million USD) -2,964-2,957-2,706-2,681-3,369
Imports of Goods and Services (Annual % Change) 3.91.3-13.420.524.0
Exports of Goods and Services (Annual % Change) 7.30.5-15.824.623.9
Imports of Goods and Services (in % of GDP) 56.454.547.953.960.9
Exports of Goods and Services (in % of GDP)

Source: World Bank ; Latest available data

Foreign Trade Forecasts 2023 (e)2024 (e)2025 (e)2026 (e)2027 (e)
Volume of exports of goods and services (Annual % change)
Volume of imports of goods and services (Annual % change)

Source: IMF, World Economic Outlook ; Latest available data

Note: (e) Estimated Data

International Economic Cooperation
Bosnia and Herzegovina is a member of the Central European Free Trade Agreement (CEFTA) and has signed a Free Trade Agreement with Turkey. The Stabilisation and Association Agreement (SAA) between the EU and Bosnia and Herzegovina went into effect on 1 June 2015. The SAA Agreement is a commitment to further the relationship between the EU and Bosnia and Herzegovina and will complement the existing interim trade agreement. Bosnia and Herzegovina also has preferential regimes with the U.S., Australia, New Zealand, Switzerland, Norway, Russia, Japan and Canada.

Main Partner Countries

Main Customers
(% of Exports)
Croatia 14.9%
Germany 14.8%
Serbia 13.9%
Italy 11.1%
Austria 9.5%
See More Countries 35.8%
Main Suppliers
(% of Imports)
Italy 12.3%
Serbia 10.8%
Germany 10.5%
Croatia 9.9%
China 8.1%
See More Countries 48.4%

Source: Comtrade, Latest Available Data



Political Outline

Current Political Leaders
Presidency of Bosnia and Herzegovina (three-member body): Chairman of the Presidency Zeljka CVIJANOVIC (chairman since 16 November 2022; presidency member since 16 November 2022 - Serb seat); Zeljko KOMSIC (presidency member since 20 November 2018 - Croat seat); Denis BECIROVIC (presidency member since 16 November 2022 - Bosniak seat)
Next Election Dates
Presidential: October 2026
Parliamentary Assembly: 2026
Main Political Parties
Political parties are typically founded on an ethnic basis, these forces often lead to the creation of coalitions. The main parties represented in the Parliament include:

- Party of Democratic Action (SDA): centre-right, Bosniak nationalism, Islamist
- Alliance of Independent Social Democrats (SNSD): Serbian nationalism and social democracy
- Croatian Democratic Union of Bosnia and Herzegovina (HDZ BiH) and its allies: centre-right, Christian democratic
- Social Democratic Party of Bosnia and Herzegovina (SDP): centre-left, influenced by Communism, but promotes social democracy
- Serbian Democratic Party (SDS): centre-right, comprised of Serbian nationalists, Pro-European
- Democratic Front (DF): centre-left, Pro-European, promotes social democratic ideals
- Civic Alliance (GS): centre-left, in coalition with DF
- People and Justice (NIP): liberal, conservative
- Party of Democratic Progress (PDP): national conservatism
- Our Party (NS): social-liberalism
- People's European Union of Bosnia and Herzegovina (NES): centre, pro-European
- For New Generations (ZNG): social liberalism, pro-European.
Executive Power
The function of the collective Head of State is performed by the Presidency of Bosnia and Herzegovina. The Presidency is comprised of three members: one Bosniac, one Croat and one Serb, representing the Federation of Bosnia and Herzegovina and the Republic of Srpska. Members of the Presidency, the Croat and Bosniac candidates from the Federation of Bosnia and Herzegovina and the Serb candidate from the Republika Srpska, are elected by direct elections, for a period of four years. The Chairmanship of the Presidency is rotated every eight months among the three.

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.

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

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

The House of Peoples has 15 delegates serving a four-year term, two-thirds coming from the Federation of Bosnia and Herzegovina (five Croats and five Bosniaks) and one–third from the Republika Srpska (five Serbs).

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.



COVID-19 Country Response

Travel restrictions
Regularly updated travel information for all countries with regards to Covid-19 related entry regulations, flight bans, test and vaccines requirements is available on TravelDoc Infopage.
To find information about the current travel regulations, including health requirements, it is also advised to consult Travel Regulations Map provided and updated on a daily basis by IATA.
Import & export restrictions
A general overview of trade restrictions which were adopted by different countries during the COVID-19 pandemic is available on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.
Economic recovery plan
COVID-19#B">IMF’s Policy Tracker platform.
Support plan for businesses
For an evaluation of impact of the Covid pandemic on SMEs and an inventory of country responses to foster SME resilience, refer to the OECD's SME Covid-19 Policy Responses document.
You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.