Bosnia and Herzegovina overview

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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 5 July 2017

Bosnia and Herzegovina 's policy response to the coronavirus crisis

The EBRD is monitoring Bosnia and Herzegovina 's policy response to the coronavirus pandemic. Our biweekly publication identifies the major channels of disruption as well as selected impact and response indicators.

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EBRD forecast for Bosnia and Herzegovina’s real GDP Growth in 2020 -5.0%

EBRD forecast for Bosnia and Herzegovina's real GDP growth in 2021 3.0%

GDP growth in Bosnia and Herzegovina, which slowed already in 2019, decelerated further in the first quarter of 2020, to 2.0 per cent year-on-year. While GDP figures for the second quarter are not yet available, other data point to a steep economic decline. The manufacturing sector has been hit seriously by the Covid-19 pandemic and saw its output falling by 12 per cent year-on-year in the first seven months of the year.
Certain industries, such as base metals and manufacturing of furniture, decreased their output by more than 30 per cent year-on-year in the same seven-month period. The tourism sector has also been severely affected: in July 2020, foreign tourist arrivals were more than 80 per cent lower than in July 2019. Because of the pandemic, remittances are also expected to decline.
Inflation has been negative in year-on-year terms since April 2020, as a consequence of a fall in transport, clothes and footwear prices, and the entitygovernments’ decisions to restrict margins on certain products during the emergency situation. As a response to the crisis, the governments have adopted a set of measures aimed to mitigate the impact of the crisis on individuals and firms. GDP is forecast to fall by 5.0 per cent in 2020 and grow by 3.0 per cent in 2021.
Risks to the projection are weighted on the downside, related to the potential resurgence of the epidemic, a possibly slower-than expected recovery in the main export markets in the Eurozone, and uncertainty about progress in terms of implementation of the country’s structural reform agenda.


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