Bosnia Herzegovina’s economy has been slowed down by the global recession. International trade is the main economic driver of the country.

Gross domestic product (GDP)

Bosnia Herzegovina’s GDP experienced a steady increase from 2005 to 2008. In 2009, the GDP witnessed a marginal decrease bringing GDP to BAM 23.99 billion.

(Source: Central Bank, page: 14)

 

GDP Growth Rate

In 2005, real GDP growth rate registered at 3.9%. The rate increased to 6.2% by 2007. From 2008 to 2009 the rate fell sharply to -2.9%.

 

 

(Source: Central Bank, page: 14)

 

 

Gross National Income (GNI) at Purchasing Power Parity (PPP)

Bosnia Herzegovina’s GNI at PPP increased from 2000 to 2010. In 2010, it recorded at USD 8,222.

(Source: UNDP.org, page: 4)

 

 

Inflation

Bosnia Herzegovina’s inflation rate recorded strong variations from 2005 to 2009. In 2007, inflation reached its highest at 4.94%. It fell sharply to -0.03% in 2009. For 2010, the rate is estimated to be 3.34%.

(Sources: imf.org, Select ‘2005’ and ‘prepare report’) e = estimate

Tax Rate

Bosnia Herzegovina has individual an income tax flat rate of 10%.

(Source: Tax Rates)

Corporate Tax

The corporate income tax in the country is 10% and the VAT rate is 17%.

(Source: Tax Rates)

Foreign Direct Investment (FDI)

FDI inflow witnessed a sharp increase from 2006 to 2007 and a sharp decline from 2007 to 2008. From 2005 to 2010 the highest FDI inflows were recorded in 2007 at BAM 2,973 million. At the end of 2010, the country experienced negative FDI of BAM 143 million.

(Source: Central Bank, page: 214)

Portfolio Investment Inflow

Direct and Portfolio investments increased steadily from BAM 1,221.2 million in 2005 to BAM 2,785.90 million in 2008. In 2009, the amount registered at BAM 2,612.9 million.

 

(Source: Central Bank, page: 218)

Central Bank Assets

The Central Bank of Bosnia Herzegovina is the regulatory authority of the country’s monetary sector. From 2005 to 2007, the bank’s total assets increased steadily from BAM 4,254.30 million to BAM 6,728.50 million. Assets witnessed a marginal fall from 2007 to 2009. As of Q3 2010, the amount was recorded at BAM 6,287.40 million.

(Source: Central Bank, page: 132)

Consumer Price Index (CPI)

The CPI in Bosnia Herzegovina experienced fluctuations from 106.1 in 2006 to 101.9 in 2010 (September).

(Sources: Central Bank, page: 122)

Interest Rates

Rates for Households (%)

Interest rates for households witnessed a marginal decrease from Q3 2009 to Q3 2010. In Q3 2010. The rate on demand deposits was recorded at 0.16% and the rate on time and savings deposits was 2.92%.

 

	Q3 2009	Q4 2009	Q1 2010	Q2 2010	Q3 2010
Demand Deposits	0.25	0.25	0.19	0.18	0.16
Time & Savings Deposits	3.57	3.57	3.31	3.21	2.92

(Source: Central Bank, page: 70)     

Rates for private enterprises (%)

Interest rates for private enterprises declined steadily from Q3 2009 to Q3 2010. In Q3 2010, the rate on demand deposits was recorded at 0.18% and the rate on time and savings deposits was 1.97%.

	Q3 2009	Q4 2009	Q1 2010	Q2 2010	Q3 2010
Demand Deposits	0.30	0.30	0.21	0.19	0.18
Time & Savings Deposits	4.09	3.60	2.93	2.28	1.97

(Source: Central Bank, page: 70)     

Money Supply

The amount of currency in circulation increased from 2005 to 2008. In 2009, the amount fell from the previous year by 11.15%.

(Source: Central Bank, page: 69)

 

Government Expenditure

In 2010 Q2, government expenditure was BAM 2453.10 million.

(Source: Central Bank, page: 202)

Official Exchange Rate

Bosnia Herzegovina’s exchange rate experienced fluctuations from 2005 to 2010 (till Q3) against USD. As of Q3 2010, the rate of BAM/USD was registered at 1.50.                                                                                                                                   

(Source: Central Bank, page: 198)

Government finances

Fiscal Balance

From 2005 to 2008, Bosnia Herzegovina’s fiscal balance witnessed a surplus. In 2009 and 2010 (till Q2), the balance was recorded at a deficit of BAM 322 million and BAM 20.4 million respectively. 

 

 

(Source: Central Bank, page: 202)

Total Revenue

The government’s total revenue increased steadily from BAM 7,122.10 million in 2005 to BAM 10,903.10 million in 2008. In Q2 2010, total revenue was registered at BAM 2,432.70 million.

(Source: Central Bank, page: 202)

Tax Revenue

there has been a steady rise in tax revenue from 2005 to 2008. As of Q2 2010, tax revenue was recorded at BAM 1,264.80 million.

 

(Source: Central Bank, page: 202)

Total Grants

In 2005, total grants & other revenue received amounted to BAM 1,019.10 million. Grants increased until 2008. In Q2 2010, total grants registered at BAM 223.8 million.

 

(Source: Central Bank, page: 202)

Public Debt

In 2005, the public debt level amounted to BAM 4,338 million. Debts declined gradually from 2005 to 2007. But from 2007 to 2009, external debt increased steadily reaching BAM 5,234 million.

 

(Source: Central Bank, page: 14)

Current Account Balance

Bosnia Herzegovina’s current account balance remained negative from 2005 to 2009. In 2009, it registered a deficit of BAM 1,643 million.

(Sources: Central Bank, page: 14)

Balance of Payments

Bosnia Herzegovina’s balance of payments had a steadily increasing surplus from 2005 to 2007. The balance declined marginally thereafter, amounting to BAM 6,212 million in 2009.

 

(Sources: Central Bank, page: 14)

The Federal Ministry of Labour and Social Policy is responsible for issues concerning labour rights, labour and employment policies, occupational safety, insurance and pension, labour welfare, labour relations and social security in Bosnia Herzegovina.

(Sources: Federal Ministry of Labour and Social Policy) 

Unemployment Rate

Bosnia Herzegovina’s unemployment rate declined steadily from 2006 to 2008. It increased marginally to 24.1% in 2009.

Minimum Wage

In 2009, the minimum wage in the Federation of Bosnia Herzegovina was BAM 343 per month. The wage in Republika Srpska was BAM 320 per month.

(Sources: Minimum Wage.org) 

Bosnia Herzegovina is a parliamentary democratic republic. The country’s political system consists of three levels:

·         Entity level- including prime minister’s government, president, vice-president and the parliament

·         Canton level- comprising of ten cantons with their own assemblies

·         Municipal level, where every municipality has its assembly

Nermin Niksic is the Prime Minister and Jerko Ivankovic-Laijanovic is the Deputy Prime Minister of the nation.  The Prime Minister holds the authority to enforce federal authority laws, prepare parliamentary budget proposals and to issue recommendations on legal matters.

(Source: Government of Bosnia Herzegovina,un.org, page: 6)

Regulatory Environment

Bosnia Herzegovina stands 104^th on the 2011 Economic Freedom Index with a score of 57.5. The country is ranked 39^th amongst 43 countries of the Europe region.

(Source: Heritage.org)

Freedom of Information

In 2010, Bosnia Herzegovina ranked 47^th on the Press Freedom Index. The index contains countries with scores ranging from zero, implying the most freedom, to about 105. Bosnia Herzegovina scored 13.50 points on this index indicating moderate regulations on the media.

(Source: rsf.org)

Some of the popular newspapers in the country are: Dnevni Avaz, Oslobodjenje, Glas Srpske, Dani and Nezavisne Novine.

(Source: BBC)

Corruption perception

The Corruption Perceptions Index (CPI) is a survey that measures the perceived level of corruption across countries worldwide. Bosnia Herzegovina is ranked 91^st out of 178 countries in the 2010 index, indicating that it is perceived as moderately corrupt.

(Sources: Transparency.org)

Judicial System

The supreme body in all legal concerns is the ‘Constitutional Court of Bosnia and Herzegovina.’ The Ministry of Justice is responsible for co-ordination with international courts, administrative functions of legal entities and formulating proposals on laws and regulations.

The main judiciary entities at national level include: Court of Bosnia Herzegovina, Prosecutor’s office of Bosnia Herzegovina, Prosecutors Council and Public Attorney’s Office of Bosnia Herzegovina.

The Ministry of Justice co-ordinates with international legal authorities such as: International Court of Justice and International Criminal Tribunal for Foreign Yugoslavia.

(Sources:Ministry of Justice, un.org, page: 8)

The country witnessed a relatively constant population from 2005 to 2009. In 2010, the population of the nation was 3.8 million.

(Source: Central Bank, page: 112)

The country’s gender ratio was recorded at 106.7 (men per 100 women) in 2010.

(Source: UNDP, page: 181) 

In 2009, the population below 14 years of age in the country was 15.4% of the total population. In 2009, 20.3% women and 17.1% men (% of total population) were aged above 60 years of age.

(Source: UN)

The average life expectancy in the country for males was 72.4 years and for females was 77.4 years in 2010.

(Source: UN)

In 2008, under-5 mortality (per 1000 live births) registered at 15. In 2009, the mortality rate was 10 (per thousand people).

(Source: UNDP, World Bank)

In 2009, the crude birth rate registered at 9 per thousand people.   

(Source: UNICEF)

The country is ranked 68^th on United Nation’s Human Development Index. It falls in the category of ‘High Human Development’. HDI integrates a country’s life expectancy, schooling and income. This signifies the overall social and economic development of a nation. A rank between 43 and 85 indicates ‘high human development’ on UNDP Index.

(Source: UNDP, page: 145) 

Education

Primary education, from 6 to 15 years of age, is compulsory. It is followed by General Secondary education consisting of general education, art school and theology school lasting for four years. Diploma schools provide technical and vocational training. This training falls under specialized courses that last three to four years.

There are about 1,089 primary schools and 289 secondary schools in the country.

The country has eight universities offering higher education:

·         University of Banja Luka

·         University of Bifac

·         University of Dzemal Bijedic

·         University of East Sarajevo

·         University of Mostar

·         University of Sarajevo

·         University of Tuzla

·         University of Zenica

Bosnian, Croatian and Serbian are the national languages of instruction.

In 2010, Bosnia Herzegovina’s literacy rate was registered at 96.7%.

(Source: Euroeducation, UNDP page: 189, East Europe Franchise, page: 2)

Health

There are 13 ministries of health in the country. These are allotted to ten cantonal ministries, Brcko district, Republika Srpska and the Federation level. Health system administration and management varies across districts.

The country has four types of hospitals: Specialized hospitals, Small district hospitals, Clinical centres and General Acute hospitals.

(Source: Saglik.gov, page: 74)

Collection agreements have been enforced to fund the healthcare system. Contributions are collected by the government from various groups such as, farmers, public sector employees and the self-employed. Collection rates are unevenly segregated and cause difficulties in funding the system.

(Source: Saglik.gov)

Roads

In 2006, Bosnia Herzegovina’s total road length was measured at 23,000 km., out of which two-lane roads covered 2,045 km.                       

(Sources: Eurorap.org)

Railways

(Source: Railway Federation of Bosnia Herzegovina)

Bosnia Herzegovina’s total railway length was recorded at 608,495 km.

Goods are transported on the Railways of Federation of Bosnia Herzegovina

(Source: Railway Federation of Bosnia Herzegovina)

Ports

The country has a single sea port and is located at Neum.

(Source: Marinas)

Airways

There are 4 airports in the country.

(Source: Aircraft World Charter)

Sarajevo airport is the main airport of Bosnia Herzegovina.

Telecommunication

Fixed Telephone Lines

From 2005 to 2007, the number of telephone lines installed across the country increased steadily. From 1.06 million in 2007, the number of users declined to 1.03 million in 2008. In 2009, the number of fixed telephone line users in the country was recorded at 998,644.

(Source: itu.int)

Radio and TV of Bosnia and Herzegovina, Serb Republic Radio-TV and Federation TV are public broadcasters of television services.

Some of the nation’s radio channels are, Radio FBiH, BM Radio, Radio Herceg Bosna, Radio and TV of Bosnia and Herzegovina.

(Sources: Worldbank.org, bbc)