Travel

Economy and Business in Bosnia and Herzegovina

The Bosnia War of 1992–1995 caused major damage to the country’s infrastructure and was very devastating to business. Although the damage has been largely repaired, the economic situation in Bosnia and Herzegovina is difficult. Among other things, this has to do with a highly decentralized governance system that prevents effective coordination of economic policy and coordinated economic reforms. The country also faces major challenges with corruption.

Gross domestic product (GDP) per capita was in 2017 12,700 dollar. Of the current countries that were formerly part of Yugoslavia, only Kosovo has a lower GDP per capita. In 2016 and 2017, Bosnia and Herzegovina’s GDP increased by 3.2 and 3.0 per cent, respectively. At the same time, unemployment fell from 25.4 per cent in 2016 to 20.5 per cent in 2017.

Town of Mostar

From the town of Mostar, approx. 100 km south of Sarajevo. The new bridge over Neretva is an exact replica of the old bridge dating from 1566, which was destroyed during the Bosnian civil war of 1992–95. 

Agriculture and forestry

The agricultural area covers 42.2 per cent of the land area. 18 percent of the working population are employed in agriculture, which accounts for 6.8 percent of the country’s GDP (2017). Among other things, it is grown maize, wheat, barley, oats, potatoes, sugar beets, fruit (especially plums) and tobacco. Cattle and sheep farming is also important

42.8 per cent of the land is covered by forests, which have provided the basis for the furniture and paper industry.

Industry, mining, and energy

The industrial structure is largely based on outdated heavy industry. 30.4 per cent of the working population is employed in industry and mining, which contributes 28.9 per cent of the country’s GDP. In addition to the furniture and paper industry, the industrial activities include the production of iron and steel (Zenica, Ilijaš, Jajce), aluminum (Mostar) and the chemical industry (Tuzla), textile industry (Sarajevo and Mostar) and the machinery and automotive industry (Sarajevo).

The mineral resources are substantial, with iron ore (near Vareš and Ljubija), lignite (near Sarajevo and Mostar), copper (near Gornji Vakuf), chromium and manganese ore, salt, bauxite and more.

100 km south of Sarajevo

From the town of Mostar, approx. 100 km south of Sarajevo. The new bridge over Neretva is an exact replica of the old bridge dating from 1566, which was destroyed during the Bosnian civil war of 1992–95.

In 2016, approximately 65 per cent of the consumption of electrical energy came from coal power plants and 35 per cent from hydroelectric power plants. During the civil war, much of the country’s power supply was destroyed.

Transport and Communications

Large parts of the rail and road network were devastated during the war in 1992–1995. After the war it has gradually been rebuilt. In Bosnia and Herzegovina, there are 22,926 km of roads, of which 19 426 km are paved. The railway network is at 926 km. There are international airports at Sarajevo, Tuzla, Banja Luka and Mostar.

Foreign Trade

Bosnia and Herzegovina’s exports amounted to USD 5.205 billion in 2017, while imports amounted to USD 9.547 billion. With this, the country had a deficit in the foreign trade balance of USD 4.342 billion.

The five most important export markets (2017) are: Germany (14.7 per cent), Croatia (11.8 per cent), Italy (11.1 per cent), Serbia 10.0 per cent and Slovenia (9 per cent). Important export goods are metals, furniture, car seats and clothing.

The five most important markets for Bosnia and Herzegovina’s imports (2017) are: Germany (11.6%), Italy (11.3%), Serbia (11.1%), Croatia (10.1%) and China (6), 5 percent). Important import goods are machinery and equipment, chemicals, oil, coal and vehicles.