Discusses key economic indicators and trade statistics, which countries are dominant in the market, the U.S. market share, the political situation if relevant, the top reasons why U.S. companies should consider exporting to this country, and other issues that affect trade, e.g., terrorism, currency devaluations, trade agreements.
Last Published: 7/17/2019

  • Bosnia and Herzegovina (BiH) is a transitional economy with a declining population of approximately 3.5 million.  Per capita GDP in 2018 was $4,910 with total nominal GDP of approximately $18.05 billion according to the World Bank.  According to the World Bank’s Economic Report (April 2019), BiH’s economic growth is expected to gain speed in 2019 and 2020 before reaching 4% in 2021, backed mainly by consumption and to some extent by public investment. European Bank for Reconstruction and Development (EBRD) cut its 2019 economic growth forecast for BiH from 3.5 percent to 3.0 percent due to the delays in government formation and implementation of the IMF program. The Bank also forecast GDP growth at 3.0 percent in 2020, although it highlighted potential risks emanating from euro area growth, and uncertain progress on BiH’s reform agenda and its EU accession goals.

  • BiH has been a potential candidate country for European Union (EU) accession since 2003.  Although BiH’s progress towards EU accession has been slow, the country’s Stabilization and Association Agreement (SAA) entered into force on June 1, 2015.  BiH submitted its formal application for EU membership on February 15, 2016.  The Government of BiH completed the European Commission’s (EC) Questionnaire and submitted answers to the 3,242 questions in February 2018 and to the 655 follow up questions later that year.  The EC officially released its Opinion on May 29th, 2019 identifying fourteen recommendations for BiH before it can be granted candidate status. 

  • BiH consists of two entities: the Federation of BiH (the Federation) and the Republika Srpska (RS).  A third, smaller area, the Brčko District, operates under a separate administration.  The Federation is further divided into ten cantons, each with its own government and responsibilities.  Both entities and the Brčko District are also comprised of municipalities.  As a result, BiH has a multi-tiered legal and regulatory framework that is often duplicative and contradictory and creates opportunities for corruption.According to the BiH Central Bank, foreign direct investment (FDI) in BiH in 2018 amounted to $458 million..  The all-time high for FDI was $2.1 billion in 2007.  Most investments in 2013-2018 came from Croatia, Austria, Russia, Serbia, UAE, and the United Kingdom.  

  • BiH imports almost twice as much as it exports: 2018 imports totaled $11.7 billion with exports of $7.2 billion.  The country is able to finance this trade deficit through extensive remittances from the 2 million-strong BiH Diaspora living outside the country.  In 2018, U.S. exports to BiH increased by 13 percent in 2018, from $336.9 million in 2017 to $380.5 million in 2018. U.S. products and services held a 3.2 percent share of total BiH imports in 2018.  U.S. exports to BiH are primarily in the areas of agricultural products, machinery and transport equipment, and raw materials for industrial processing.  Primary BiH exports to the United States are leather products, apparel manufacturing products, furniture and fixtures, and petroleum and coal products. 

  • BiH operates a currency board arrangement by which the Bosnian Convertible Mark (KM) is pegged to the euro (One Euro = KM 1.958).  As a result, the Convertible Mark is one of the most stable currencies in Southeast Europe. 

  • U.S. companies in BiH include major multinational companies and market leaders in their respective sectors, such as Coca-Cola, Microsoft, Cisco, Oracle, Pfizer, McDonalds, Marriott, Caterpillar, Johnson&Johnson, FedEx, UPS, Philip Morris, KPMG, Price WaterHouse Coopers and others.

  • U.S. investment in BiH is low due to the small market size, relatively low-income levels, distance from the United States, challenging business climate, and the lack of investment opportunities.

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.