Bosnia & Herzegovina profile

Demography and Health

Bosnia and Herzegovina (BiH) is a small Balkan country with a population of about 3.16 million in 2024. The demographic dynamics point to a balance of natural aging and outward movement: birth rate stands at 7.71 per 1,000 people (2023) while the death rate is higher at 13.5 per 1,000 people (2023), suggesting a natural decline without assuming large-scale mortality shocks. Life expectancy at birth is 77.8 years (2023), reflecting solid health outcomes relative to many lower-income peers in the region, though mortality in early childhood remains a concern given the under-5 mortality rate of 6.0 per 1,000 live births (2023). The country experienced a negative net migration of about 4,500 people in 2024, indicating continued outflows that can suppress potential population growth and challenge long-term labor market and pension dynamics. On the health expenditure side, current health expenditure accounts for 8.72% of GDP (2022), with domestic general government health expenditure per capita, PPP, at around 1,202 international dollars (2022), signaling a moderate level of public investment in health alongside private spending. The suicide mortality rate is 8.97 per 100,000 (2021), a reminder of ongoing mental health and social well-being challenges that benefit from integrated health and social policies. Undernourishment remains low at 2.5% of the population (2022), indicative of relative food security, even as the country seeks to improve nutrition and health outcomes amid demographic and economic transitions.

Economy

BiH presents a modest economy by European standards, with GDP per capita around 8,957 current US$ in 2024 and a GDP per capita at PPP of about 21,971 international US$, highlighting real purchasing power above the nominal income level. The inflation rate is contained at 1.69% in 2024, pointing to price stability that supports household planning and investment. Unemployment stood at 10.7% in 2023, a respectable level given structural reforms needs, though regional disparities and skill mismatches likely persist. The economy shows a degree of openness: high-technology exports totaled about 335 million US$ in 2023, and R&D expenditure amounts to 0.192% of GDP in 2023, indicating a still-evolving innovation ecosystem with ample room for growth. Public and private investment is supported by foreign direct investment net inflows at 3.98% of GDP in 2024, signaling continued international interest, albeit within a challenging governance and regulatory environment. The economy is moderately export-oriented, with exports of goods and services representing 42.8% of GDP in 2024 and imports at 57.2% of GDP, suggesting a reliance on external inputs and the importance of trade facilitation. Energy and productivity dynamics are shaped by renewable resources and gradual modernization, factors that will influence future competitiveness and living standards as structural reforms progress.

Trade and Investment

BiH has an economy that is fairly open to trade, with exports of goods and services making up 42.8% of GDP in 2024 and imports at 57.2%, underscoring a significant but not excessive trade deficit exposure. The country’s high-technology exports are relatively modest, totaling about 335 million US$ in 2023, indicating that most domestic value is generated outside advanced tech sectors. Research and development remain limited, at 0.192% of GDP in 2023, which constrains the innovation channel through which export sophistication could rise. Foreign direct investment net inflows reach about 3.98% of GDP in 2024, signaling a stable but not overwhelming external investor interest. The current account balance stands at -4.15% of GDP in 2024, reflecting a financed deficit that likely depends on FDI, remittances, and other capital inflows. Taken together, the trade and investment profile shows potential for deeper integration into regional and European value chains, provided reforms strengthen governance, reduce transaction costs, and improve the business environment.

Governance and Institutions

BiH faces meaningful governance challenges as reflected in several World Bank-style indicators: Political stability and absence of violence/terrorism is -0.353 (2023), Regulatory Quality -0.141, Rule of Law -0.352, Control of Corruption -0.582, and Government Effectiveness -0.968. These negative values signal fragility in policy implementation, perceived corruption risks, and weaker state capability, which can impede investment, hinder timely public service delivery, and complicate cross-border trade and business operations. The overall governance environment suggests substantial reforms are needed to improve rule of law, contract enforcement, regulatory efficiency, and public sector performance. On the defense side, military expenditure in 2023 was 216.7 million current US$ (rank 118), indicating a relatively modest fiscal commitment to defense. Taken together, governance and institutions in BiH present a mixed picture: improving political stability and strengthening institutions would likely yield benefits for investment climate, private sector development, and sustainable public finance in the medium term.

Infrastructure and Technology

BiH’s infrastructure and technology landscape shows both progress and gaps. The Logistics Performance Index—Quality of Trade and Transport-Related Infrastructure stands at 2.6 (2022), suggesting moderate efficiency and room for improvement in transport connectivity and customs procedures. Internet access is relatively widespread, with 83.4% of the population online in 2023, indicating strong digital penetration that can support entrepreneurship, e-government, and access to information. However, the country’s innovation ecosystem remains modest: high-technology exports are around 335 million US$ (2023), and domestic R&D expenditure is just 0.192% of GDP (2023). Patent activity is low, with residents filing 53 patent applications in 2021, reflecting limited local inventive output. Renewable energy is a notable feature, with renewable energy consumption making up 36.6% of total final energy consumption in 2021, pointing to a favorable trajectory for decarbonization and energy security, contingent on further policy support and grid modernization. The combination of digital reach, moderate transport efficiency, and a nascent but growing innovation base defines a platform for gradual infrastructure upgrading and technology upgrading in the coming years.

Environment and Sustainability

BiH exhibits a moderate environmental footprint with several notable sustainability indicators. The level of water stress, measured as freshwater withdrawal as a proportion of available freshwater resources, stands at 2.03 (2021) with a rank of 148, indicating relatively manageable water pressure compared with many peers but not immune to surges in demand or drought impacts. Total greenhouse gas emissions per capita are 9.23 t CO2e (2023), which places BiH above many low-income economies but below more energy-intensive peers; this underscores both ongoing emission challenges and opportunities for decarbonization through energy efficiency and the expansion of renewable energy. Renewable energy accounts for 36.6% of total final energy consumption (2021), illustrating progress toward cleaner energy and resilience against fossil fuel volatility. The population’s nutritional status remains stable, with 2.5% undernourishment (2022), yet environmental policies and urban planning will need to address air and water quality, climate resilience, and sustainable land use as the country modernizes and integrates with larger European energy and environmental frameworks.