Bosnia and Herzegovina flag Bosnia and Herzegovina: Economic outline

Economic Outline

Economic Indicators

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, year in which an inter-ethnic conflict - that destroyed much of the Bosnian economy and infrastructure, increased unemployment and decreased production - came to an end. However, the economy still lacks competitiveness and the government launched a structural reforms program for 2019-2021 to boost private investments and exports. Following a recession caused by the outbreak of the COVID-19 pandemic, the economy grew an estimated 2.8% in 2021, mostly driven by household consumption (accounting for around three-quarters of GDP). The IMF forecasts a GDP growth of 3.3% this year, followed by 3% in 2023, although uncertainty persists due to the weak vaccination rollout and political instability.

The general government balance was negative by 2.1% of GDP in 2021; 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 markedly in 2022 thanks to a marked economic recovery. Albeit relatively low, the debt-to-GDP ratio increased from a pre-pandemic level of 32.5% to 38.9% in 2021. The ratio is forecast to remain somewhat stable in the short term (at 40.1% in 2023 – IMF). The government does not have access to markets, but it receives financing from several multilateral institutions, including the EBRD (around EUR 105 million in 2021 in partnership with the private sector) and the EU Commission (EUR 250 million in June and EUR 80.5 million in September 2021). Higher energy prices prompted an increase in inflation, which spiked to 1.8% in 2021, the same level it is expected to attain this year (IMF).

Corruption and the high level of unemployment are major hurdles to the country's economic development. The unemployment rate stood at 15.8% in 2021 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 15,935 in 2021 by the IMF.

 
Main Indicators 201920202021 (e)2022 (e)2023 (e)
GDP (billions USD) 20.20e19.79e21.6923.0124.52
GDP (Constant Prices, Annual % Change) 2.8e-4.3e2.83.33.0
GDP per Capita (USD) 6,120e6,035e6,6487,0797,568
General Government Balance (in % of GDP) 1.4-2.8e-2.1-0.8-0.4
General Government Gross Debt (in % of GDP) 32.536.7e38.940.040.1
Inflation Rate (%) 0.6-1.1e1.81.81.7
Unemployment Rate (% of the Labour Force) 15.715.9e15.815.715.6
Current Account (billions USD) -0.62-0.64e-0.84-0.79-0.81
Current Account (in % of GDP) -3.1-3.2e-3.9-3.5-3.3

Source: IMF – World Economic Outlook Database, 2016

Note: (e) Estimated Data

 
Monetary Indicators 20162017201820192020
Bosnian Mark (BAM) - Average Annual Exchange Rate For 1 GBP 2.392.232.212.132.20

Source: World Bank, 2015

 

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Latest Update: April 2022

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