Economy

Bosnia and Herzegovina (BiH) faces the dual problem of rebuilding a war-torn country and introducing market reforms to its formerly centrally-planned economy. One legacy of the previous era is a greatly overstaffed military industry; under former leader Josip Broz Tito, military industries were promoted in the republic, resulting in the development of a large share of Yugoslavia's defence plants but fewer commercially viable firms.

For the most of the country's history, agriculture has been based on small and inefficient privately-owned farms; food has traditionally been a net import for the republic.

The war in the 1990s caused a dramatic change in the economy. Production fell to 6%, GDP fell 75% and the destruction of physical infrastructure created massive economic trauma. While much of the production capacity has been restored, the economy still faces considerable difficulties. Figures show GDP and per capita income increased 10% from 2003 to 2004; this and the country's shrinking national debt are positive trends, but high unemployment and a large trade deficit remain cause for concern.

BiH has been a top performer in recent years in terms of tourism development; tourist arrivals have grown by an average of 24% annually from 1995 to 2000 (360,758 in 2002). According to an estimation of the World Tourism Organization, BiH will have the third highest tourism growth rate in the world between 1995 and 2020. Most visitors in 2002 came from Serbia and Montenegro, Croatia, Slovenia, Germany, Italy, USA, Poland, Great Britain, Austria and Spain. More recently, the town of Visoko has experienced an increase in tourist arrivals due to the alleged discovery of the Bosnian pyramids, attracting in excess of 10,000 tourists in the first weekend of June 2006 - despite scientific investigations of the site showing that there is no pyramid.

Facts and Figures

• GDP:
  • Purchasing Power Parity: $25.28 billion
    Note: Bosnia has a large informal sector that could also be as much as 50% of official GDP
  • Official exchange rate: $9.217 billion
  • Real growth rate: 6%
  • Per capita (PPP): $5,600
  • Composition by sector:
    • Agriculture: 14.2%
    • Industry: 30.8%
    • Services: 55%
• Labour force: 1.026 million
• Unemployment rate: 45.5% official rate; grey economy may reduce actual unemployment to 25-30%
• Inflation rate (consumer prices): 8.2%
• Budget:
  • Revenues: $5.643 billion
  • Expenditures: $5.677 billion
• Public debt: 24.5% of GDP
• Agricultural Products:
  • Wheat
  • Corn
  • Fruits
  • Vegetables
  • Livestock
• 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: 5.5%
• Electricity:
  • Production: 12.98 billion kWh
  • Consumption: 11.03 billion kWh
  • Exports: 3.05 billion kWh
  • Imports: 2 billion kWh
• Oil:
  • Production: 0 bbl/day
  • Consumption: 23,000 bbl/day
• Natural gas:
  • Production: 0 cu m
  • Consumption: 300 million cu m
  • Exports: 0 cu m
  • Imports: 300 million cu m
• Current account balance: -$1.73 billion
• Exports:
  • Total: $3.5 billion f.o.b.
  • Commodities:
    • Metals
    • Clothing
    • Wood products
  • Partners:
    • Croatia 18.4%
    • Italy 17.1%
    • Slovenia 14.7%
    • Germany 12.8%
    • Austria 6.5%
    • Hungary 5.2%
    • China 4.2%
• Imports:
  • Total: $8.25 billion f.o.b.
  • Commodities:
    • Machinery and equipment
    • Chemicals
    • Fuels
    • Foodstuffs
  • Partners:
    • Croatia 24.7%
    • Germany 13.6%
    • Slovenia 13%
    • Italy 11%
    • Austria 6.9%
    • Hungary 5.5%
• Reserves of foreign exchange and gold: $2.7 billion
• Debt - external: $3.927 billion
• Economic aid - recipient: $650 million
• Currency (code): konvertibilna marka (convertible mark) (BAM)