The Economy of Bosnia and Herzegovina

The war Bosnia and Herzegovina experienced in the 1990’s caused striking changes to its economy. The country has to initiate economic reforms and at the same time rebuild many of its infrastructures. It has received considerable reconstruction assistance and humanitarian aid from the international community. In 1997, 2 years of the war, the Central Bank of Bosnia and Herzegovina was established which resulted to successful debt agreement with the London Club and Paris Club. The new currency Bosnia and Herzegovina convertible mark was also introduced in 1998 and has gained extensive acceptance.

From 1994 to 2007 top investors in the country are from Austria (€1.3 billion), Serbia (€773 million), Croatia (€434 million) and Slovenia (€427 million). By January of 2006, the communication market of Bosnia and Herzegovina was finally liberalized. Internet usage is experiencing significant success through broadband services (cable & ADSL). And the mobile market is being offered by 3 telecoms providers across the country. In 2007, the country’s GDP based on purchased power parity is estimated at $29.89 billion of which 55% comes from the services sector, 30.8% from industry, and about 14.2% agriculture.

Tourism has seen major input to the economy particularly in the late 1990’s and early 2000’s and is expected to further expand in the coming years. The Lonely Planet ranks Sarajevo 43rd best city in the world while the World Tourism Organization estimated Bosnia and Herzegovina to have the 3rd highest growth rate in the tourism industry for the next 10 years.