Bosnia and Herzegovina Economy Profile 2009

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 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'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 (purchasing power parity)

$29.7 billion (2008 est.)
$28.15 billion (2007 est.)
$26.56 billion (2006 est.)
note: data are in 2008 US dollars
Bosnia has a large informal sector that may be as much as 50% of official GDP

GDP (official exchange rate)

$18.47 billion (2008 est.)

GDP - real growth rate

5.5% (2008 est.)
6% (2007 est.)
6.9% (2006 est.)

GDP - per capita (PPP)

$6,500 (2008 est.)
$6,200 (2007 est.)
$5,900 (2006 est.)
note: data are in 2008 US dollars

GDP - composition by sector

agriculture: 10.2%
industry: 23.9%
services: 66% (2006 est.)

Population below poverty line

25% (2004 est.)

Labor force

1.863 million (2007)

Labor force - by occupation

agriculture: 19.8%
industry: 32.6%
services: 47.6% (2007)

Unemployment rate

29% (2007 est.)
45.5% (31 December 2004 est.)
note: official rate; gray economy may reduce actual unemployment to 25-30%

Household income or consumption by percentage share

lowest 10%: 2.8%
highest 10%: 27.4% (2004)

Distribution of family income - Gini index

56.2 (2007)

Budget

revenues: $8.516 billion
expenditures: $8.867 billion (2008 est.)

Public debt

40% of GDP (2008 est.)
34% of GDP (2007 est.)

Inflation rate (consumer prices)

7.3% (2008 est.)
1.6% (2007 est.)

Commercial bank prime lending rate

NA% (31 December 2008)
7.17% (31 December 2007)

Stock of money

$4.49 billion (31 December 2008)
$5.13 billion (31 December 2007)

Stock of quasi money

$5.614 billion (31 December 2008)
$5.597 billion (31 December 2007)

Stock of domestic credit

$10.26 billion (31 December 2008)
$8.895 billion (31 December 2007)

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

11.6% (2008 est.)

Electricity - production

12.84 billion kWh (2006 est.)

Electricity - production by source

fossil fuel: 53.5%
hydro: 46.5%
nuclear: 0%
other: 0% (2001)

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 - imports

27,370 bbl/day (2005)

Oil - exports

0 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

NA cu m

Natural gas - proved reserves

0 cu m (1 January 2006)

Current Account Balance

$-2.763 billion (2008 est.)
$-1.931 billion (2007 est.)

Agriculture - products

wheat, corn, fruits, vegetables; livestock

Exports

$5.177 billion (2008 est.)
$4.243 billion (2007 est.)

Exports - commodities

metals, clothing, wood products

Exports - partners

Croatia 20.9%, Slovenia 16.8%, Italy 16.8%, Germany 13.1%, Austria 10.4%, Hungary 4.8% (2008)

Imports

$12.27 billion (2008 est.)
$9.947 billion (2007 est.)

Imports - commodities

machinery and equipment, chemicals, fuels, foodstuffs

Imports - partners

Croatia 24.8%, Slovenia 12.8%, Germany 12.4%, Italy 10.6%, Hungary 6.6%, Turkey 6.5%, Austria 6.4% (2008)

Reserves of foreign exchange and gold

$3.516 billion (31 December 2008 est.)
$4.525 billion (31 December 2007 est.)

Debt - external

$7.672 billion (31 December 2008 est.)
$6.734 billion (31 December 2007 est.)

Market value of publicly traded shares

$NA

Economic aid - recipient

$546.1 million (2005 est.)

Currency (code)

BAM

Currency (code)

konvertibilna marka (convertible mark) (BAM)

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

calendar year