Without strategic economic reforms and support for domestic producers, Bosnia and Herzegovina’s position in global trade will remain unfavorable, with a continuous rise in trade deficits and declining economic stability.
This is the conclusion of the Department for Macroeconomic Analysis (OMA) of the Indirect Taxation Authority (UIO) of BiH, which examined foreign trade data for the past year.
The analysis indicates that the country continues to face structural challenges, despite positive trends such as the diversification of trade partners and the growth of certain sectors.
According to the report, domestic exporters recorded a 3.7% decline in goods and services placements in foreign markets in 2024, while imports grew by 3.2% compared to the previous year, leading to a 13.7% increase in the trade deficit. The annual import coverage by exports stood at 56.1%.
“The key factors influencing Bosnia and Herzegovina’s foreign trade last year were global economic trends, the world economic situation, inflation, and recessionary pressures, which directly impacted the demand for domestic products in international markets. Additionally, fluctuations in energy, metal, and raw material prices directly affected export-import flows. The continuous price increases, particularly high inflation rates, caused a rise in trade volume. However, this growth should be attributed to price increases rather than an actual rise in physical exports and imports,” the analysis states.
Experts from the Indirect Taxation Authority remind that the EU remained BiH’s most important foreign trade partner last year, accounting for 73.1% of exports and 59.2% of imports.
The country to which BiH exported the most in 2023 was Croatia, with a 16.1% share, followed by Germany with 15.3% and Austria with 9.8% of total foreign market placements. Among CEFTA member states, Serbia was the leading export destination, accounting for 11.4% of total exports.
Compared to 2023, the most significant export declines were recorded in Montenegro (-13.6%), Italy (-12.5%), and Serbia (-11.9%). The only notable increase in exports was to the Czech Republic, which rose by 42.1%. Compared to 2022, exports to the Czech Republic increased by 53.3%, while exports to other major trade partners in 2024 declined.
These trends, as noted in the analysis, highlight the need for strategic measures to stimulate exports and reduce import dependency.
“Improving the foreign trade balance requires coordinated efforts from all relevant institutions and economic actors in the country. Significant efforts must be made to strengthen domestic production, enhance competitiveness, and explore new markets. If concrete steps are not taken, the country will face even greater economic challenges in the coming years, including further export stagnation and increased external dependence,” the Department for Macroeconomic Analysis of UIO BiH emphasized.
They also recommend working on reducing import dependency by supporting domestic production and utilizing resources more efficiently.
Products
A detailed analysis by product type revealed that the manufacturing sector remained dominant in exports, particularly metal products, machinery and equipment, and wood products. Among the ten most important export product groups, only two saw an increase: electrical machinery and equipment (+5.5%) and aluminum and aluminum products (+0.8%).
The biggest export decline in 2024, compared to the previous year, was recorded in the category of mineral fuels, mineral oils, and related products.
Source: Glas Srpske
