Bosnia and Herzegovina (BiH) is a transitional economy with a population of approximately 3 million. 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 separate self-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. 

BiH became an EU candidate country in 2022. BiH is also pursuing World Trade Organization membership.
BiH is an upper middle-income country, with an estimated 2024 GDP of $28.3 billion, with per capita GDP around $8,950. The BiH economy records lower levels of economic growth compared to its peers in the region. According to World Bank estimates, real GDP grew by 2.5 percent in 2024 and is expected to grow 2.7 percent in 2025. Economic growth in BiH is primarily driven by consumption and, to some extent, by public investment. BiH is tied closely to global value chains as it primarily exports raw materials and low-value goods rather than services. 

BiH imports almost twice as much as it exports: 2024 imports totaled $15.9 billion against exports of $8.9 billion, according to the BiH Agency for Statistics. The country finances this trade deficit through extensive remittances from the 2 million-strong BiH diaspora. The EU is BiH’s largest trading partner, importing $6.5 billion from BiH (74 percent of BiH’s total exports) and exporting $9.4 billion to BiH (59 percent of BiH’s total imports) in 2024. Overall, nearly two-thirds of BiH’s trade in 2024 was with the EU countries. Central European Free Trade Agreement (CEFTA) countries comprise the next tier of trading partners but are well behind the EU. BiH exported $1.5 billion to CEFTA countries (16 percent of total exports) and imported $1.9 billion (12 percent of total imports) in 2024, which is approximately 13.6 percent of BiH’s total trade. BiH conducts significant trade with its two biggest neighbors, Croatia and Serbia.
Trade with the United States constitutes a fraction of BiH’s total trade. 

U.S. trade data show that BiH exports to the United States more than three times what it imports, with $179 million in BiH exports to the United States but only $53 million in imports in 2024. Data from the BiH Statistics Agency, however, indicate that BiH imports from the United States were $350 million and exports $129 million in 2024. This discrepancy reflects a difference in data collection methodology, as BiH records the country of origin of goods even when imported through a third country. U.S. exports to BiH are primarily in the areas of raw materials for industrial processing, gun powder, diagnostic and laboratory reagents, agricultural products, machinery and transport equipment, and chemicals. BiH’s primary exports to the United States are ammunition and parts for military weapons, doors and windows, machinery parts, and fitness equipment.

BiH records lower levels of foreign direct investment (FDI) than its regional peers. According to data from the Central Bank of BiH (CBBH), FDI in the first six months of 2024 was $530 million, representing a decrease of 14.3 percent compared to the same period in 2023. The largest inflows came from Croatia ($233 million), Germany ($153 million), and Slovenia ($148 million), with most investments focused on financial services, retail trade, and wholesale trade. Between 1994 and 2024, approximately $12 billion of FDI flowed into BiH with the largest historic investors being Croatia (15 percent), Austria (13.7 percent), and Serbia (13.3 percent). Since 1994, EU countries have provided 59.4 percent ($6.34 billion) of the FDI in BiH, divided between the Federation (61.8 percent), Republika Srpska (37 percent), and Brcko District (1.3 percent). The main historic sectors for FDI in BiH are manufacturing, banking, trade, and telecommunications.

U.S. investment in BiH is low due to its small market size, relatively low-income levels, distance from the United States, and challenging investment climate. Most U.S. companies in BiH are represented by small sales offices concentrated on selling U.S. goods and services, with minimal longer-term investments in BiH. These offices primarily serve as points of contact for local distributors and authorized resellers, enabling U.S. firms to access the BiH market without establishing substantial operations. Despite the limited investment footprint, several major U.S. multinational corporations and market leaders have established representative offices in BiH. These companies leverage their global reputations and partnerships with local distributors to maintain a presence in the market. U.S. products are widely available through authorized resellers, ensuring access to American goods despite the lack of direct manufacturing or production facilities in BiH. U.S. companies in BiH span a variety of sectors and include major multinationals such as Coca-Cola, Microsoft, Cisco, Oracle, Pfizer, KFC, Marriott, NCR, Caterpillar, Johnson & Johnson, FedEx, UPS, Philip Morris, PepsiCo, KPMG, Deloitte, Ernst &Young, and others. Despite the challenges, U.S. companies that have overcome BiH’s difficult business environment often report returns on their investments over time.

BiH operates a stable currency board arrangement by which the Bosnian Convertible Mark (KM) is pegged to the euro (One euro = KM 1.958).

Political Environment

Visit State Department’s website for background on the country’s political and economic environment.