Bosnia and Herzegovina Economy
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In 2008, Heritage Foundation assessed Bosnia and Herzegovina’s economy to be 53.7 percent free. This gets Bosnia and Herzegovina an overall world rank of 121 for its free economy status. Out of 41 countries that form the European continent, Bosnia is 38th freest economy.
Economic freedom in Bosnia and Herzegovina
Bosnia and Herzegovina has earned a low rank because of its large government size and weak property rights. On the brighter side, Bosnia provides a high level of trade and financial freedom. Efficient privatization of banking industry is a major feature of Bosnia’s economy.
Bosnia and Herzegovina GDP
Estimations put Bosnia’s GDP figures at $27.7 billion for 2007. That is a 6 percent growth over Bosnia and Herzegovina’s GDP for the previous year. GDP per capita figures stood at around $6,100 in 2007. Services sector accounts for a major portion of Bosnia’s GDP followed by industry and agriculture.
Inflation
Between 2004 and 2006, average inflation hovered around 4.5 percent. According to CIA’s World Factbook, inflation came down to 1.6 percent in 2007.
Imports and exports
Goods and services worth about $9.947 billion were imported into Bosnia and Herzegovina in 2007. Croatia accounted for a large share of imports into Bosnia. Chemicals, machinery, fuels and foodstuffs were major goods imported by Bosnia in 2007.
In 2007, Bosnian exports amounted to nearly $4.243 billion. Croatia accounted for more than 20 percent of Bosnian exports. Metals, wood products, and clothing were major commodities exported by Bosnia to other countries.
Weaknesses
Corruption is a big problem in Bosnia and Herzegovina. Business registration processes are particularly vulnerable to corrupt practices. Employment creation is a slow-moving process in Bosnia. It also affects growth in productivity. But the major area of concern for Bosnia is property rights. Unreliable property registrations leave ample scope for judicial disputes that never get settled satisfactorily.
Future of Bosnia and Herzegovina
Bosnia and Herzegovina has to overcome challenges like unemployment, corruption and weak property rights to gain economic strength. But Bosnia scores somewhat better in factors like financial freedom and trade freedom. That offers a platform to Bosnia from where it can move towards economic progress.
