Southeast Europe Investment Guide 2007 Bosnia and Herzegovina 23 I Economic overview 1 1 General economic indicators Indicators 1 GDP EUR mln 2 GDP per capita EUR 3 Real GDP growth rate 4 Industrial production growth rate Federation BiH RS 5 Annual inflation rate Federation BiH RS 6 Annual unemployment rate 7 Balance of current account EUR mln 8 Average monthly gross salary EUR 9 Average monthly net salary EUR 10 Interest rate on long term loans capital assets 11 Interest rate on short term loans to companies 12 Interest rate on demand deposits 13 Gross external debt stock EUR mln end of period 14 Foreign exchange reserves EUR mln end of period 15 Exchange rate of BAM for 1 EUR fixed since 2000 2002 2003 2004 2005 5 957 1 556 5 5 6 290 1 642 3 0 7 495 1 950 6 0 8 052 2 095 7 41 9 2 2 5 4 8 5 7 13 2 9 7 6 1 19 8 0 2 1 7 40 9 1 319 337 228 10 59 12 07 1 44 2 193 1 260 1 95583 0 2 1 8 42 0 1 539 367 247 9 18 10 54 0 96 2 052 1 422 1 95583 0 3 1 9 43 2 1 544 382 257 8 23 9 92 0 54 2 061 1 768 1 95583 3 02 5 22 31 33 1 695 408 275 7 70 9 03 0 45 2 192 2 145 1 95583 Source Central Bank of BiH Statistical Office of BiH Federal Office of Statistics Institute for Statistics RS Ministry of Finance and Treasury BiH 1 Notes Nominal growth rate 2 Retail price indexes 3 The Labour Force Survey was for the first time carried out in April 2006 as an annual survey 1 2 Foreign trade 1 2 1 Foreign trade regime and major regulations Foreign trade regime of Bosnia and Herzegovina BiH has been largely adjusted to the concept and system of the WTO principles The current Law on Foreign Trade Policy LFTP entered into force in October 1997 The Law on Custom s Tariff December 2004 is the major trade policy instrument Products are incorporated in the Harmonised System of Tariff Nomenclature 1 2 2 Customs regime Bosnia and Herzegovina has had an observer status at the WTO since July 1999 and follows its policies on customs protection LFTP and The Law on Customs Policy December 2004 regulates the basic elements of the system for protection of the economy of BiH the rights and obligations of all operators in the customs clearance procedures of goods and passengers the customs territory the customs line the customs frontier zone the customs supervision the customs clearance procedures and other institutes that regulate the Customs protection system No customs duties are charged on tools measuring instruments and devices service vehicles and equipment sent to a company by a foreign legal person with whom a contract regarding agency consignment stock or services has been signed for the purpose of performing services within the framework of the concluded contract pursuant to LFTP Natural and legal persons may perform services without fee for humanitarian scientific educational cultural health social sport religious and other non commercial purposes upon approval issued by the competent Ministry pursuant to conditions stipulated by the Council of Ministers The Law on Custom s Tariff establishes the customs duties rates Tariffs are prescribed in accordance with obligations taken by international agreements and rules The tariff rates range between 0 and 15 1 2 3 Exports and imports Trade volume EUR mln 2002 2003 2004 2005 Exports 1 068 1 242 1 540 1 934 Imports 4 037 4 277 4 818 5 715 Source Agency for Statistics of BiH www seeurope net Southeast Europe Investment Guide 2007 Bosnia and Herzegovina 24 1 2 4 Structure of foreign trade by regions Exports by country groups 2005 EU 25 53 Imports by commodities 2005 Machinery and transport equipment 26 European developing countries 40 Manufactures classified by material 20 Other developed countries 6 Food and live animals 13 Other developing countries 1 Mineral fuels and lubricants 13 Source Agency for Statistics of BiH Imports by country groups 2005 EU 25 50 Chemical products 11 Miscellaneous manufactured articles 10 Others 7 European developing countries 35 Other developed countries 8 Other developing countries 7 Source Agency for Statistics of BiH 1 2 5 Major trade partners Top 10 export partners in 2005 Croatia 20 Serbia and Montenegro 16 Italy 13 Germany 11 Slovenia 10 Austria 4 Hungary 4 USA 3 Lithuania 2 Great Britain 2 Top 10 import partners in 2005 Croatia 17 Germany 14 Serbia and Montenegro 10 Italy 9 Slovenia 7 Austria 4 Hungary 4 Russia 3 Turkey 3 France 2 Source Agency for Statistics of BiH 1 2 6 Structure of foreign trade by commodities Exports by commodities 2005 Manufactures classified by material 27 Crude materials except fuels 21 Machinery and transport equipment 17 Miscellaneous manufactured articles 16 Mineral fuels and lubricants 9 Food and live animals 5 Others 5 Source Agency for Statistics of BiH www seeforum org Source Agency for Statistics of BiH 1 2 7 Free trade agreements European Union According to the preferential regime with the EU all goods that fulfill the EU technical technological standards and originate from BiH can be imported to all EU 25 countries until the end of 2010 without any quantitative restrictions and without paying customs and other similar duties Country Date of entry into force Albania 01 12 2004 Bulgaria 01 12 2004 Croatia 01 01 2001 Greece EU preferential regime Macedonia 01 09 2003 Moldova 01 10 2004 Romania 01 12 2004 Serbia and Montenegro Slovenia Turkey 01 06 2002 EU preferential regime 01 07 2003 1 2 8 Free trade zones The free zones are part of customs territory of BiH managed by the founder of the free zone Each free zone has the status of legal entity and it acquires legal and business capability by registration under the Act on Establishing Free Zone in the Court Register Free zone founders may be one or more domestic and foreign legal entities registered in BiH The Council of Ministers of BiH following a proposal of the Ministry for Foreign Trade and Economic Relations of BiH gives its consent for the free zone establishment if on the basis of the submitted feasibility study on justification of the establishment of the free zone and other Southeast Europe Investment Guide 2007 Bosnia and Herzegovina accompanying evidence it can be assessed that the value of goods exported from a free zone will exceed at least 50 of the total value of manufactured goods leaving the free zone within a period of 12 months The users of the free zone domestic and foreign legal and natural entities can rent land or facilities within the zone for a maximum of 30 years The users of the free zone do not pay taxes and contributions
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