Bosnia and Herzegovina overview

Share this page:

In Bosnia and Herzegovina we focus on:

Restructuring and expansion of the local private sector: Bosnia and Herzegovina has a strong industrial heritage, an abundant supply of energy, and significant resources to support processing industries. The EBRD will target local and foreign companies for investments in the country and provide financing for restructuring and expansion of smaller local companies. We will provide SME credit lines through local banks, microfinance loans and non-financial support.

Forging closer linkages with wider regional markets: A small open economy such as Bosnia and Herzegovina's can reach its full economic potential only by integrating closely with wider regional markets. Regional integration, both physical and commercial, will become even more important in the new strategy period as Bosnia and Herzegovina now has a border with the EU as of 1 July 2013, following Croatia’s accession to the EU. The EBRD will support private investments, increased trade flows and infrastructure improvements deepening regional integration. We will encourage greater private sector involvement in public infrastructure upgrades and put a strong emphasis on improvements of standards towards EU norms.

Promoting a more efficient and sustainable use of resources: Public entities and private companies make very inefficient use of existing resources, resulting in unnecessarily high energy costs and significant environmental damage. To support more efficient and sustainable use of resources, the Bank will focus on sustainable energy investments with high demonstration effects. The Bank will provide direct financing for energy and resource efficiency improvements for large corporate clients, both in the private and public sectors, and for the restructuring and commercialisation of municipal utility companies. The Bank will continue an active policy dialogue on sustainable use of resources, using technical assistance, in close cooperation with other donors.
The EBRD’s latest Bosnia and Herzegovina strategy was adopted on 6 April 2022

EBRD forecast for Bosnia and Herzegovina’s real GDP Growth in 2022 3.0%

EBRD forecast for Bosnia and Herzegovina's real GDP growth in 2023 2.3%

The economic recovery of 2021 continued into 2022, as GDP expanded by 5.5 per cent year-onyear in the first quarter of the year. The expansion comes on the back of the base effect of last years’ moderate growth, reflected in strong investment and household consumption, alongside robust external demand. Financing for households and business has picked up in the first half of 2022, and the share of nonperforming has fallen to just to 5.2 per cent of total loans in the second quarter of 2022. Goods exports were nominally up by 38 per cent in the first seven months of 2022 year-on-year, led by base metals and mineral fuels (mainly electricity), as industrial producers benefitted from surging prices. Import of goods, rising by 40 per cent in the same period, overshot export growth as oil and gas imports became more expensive. Inflation reached 16.7 per cent annually in July 2022, the highest rate in the Western Balkans region.

Fiscal measures in response include temporary increases in state aid, higher than envisaged pension hikes and an export ban on wood pellets, while electricity prices for households are kept fixed countrywide. Overall, 30 output growth is projected at 3 per cent in 2022 and 2.3 per cent in 2023. Risks to the outlook are tilted toward the downside as elevated inflation and tighter commercial financing conditions are likely to dampen domestic demand. The worsening external environment and an anticipated economic slowdown in the second half of 2022 and into 2023 in Eurozone export markets are also serious risks.



Share this page: