Western Balkans Competitiveness Outlook 2024
Economic convergence of Bosnia and Herzegovina in the business environment cluster
The data related to the outcome indicators show the BIH performance relative to the EU,
i.e., EU = 1. (OECD= 1 for the OECD good policy practices, standards, and tools).
Policy outcomes
Score
0
1/3 2/3 1
Performance relative
to the EU
Change
OECD good policy
practices, standards,
Performance relative
to the OECD
Change
2008-
2013-
2018-
2012
2017
2022
2008-12
to 2018-22
and tools
2016- 2018- 2020-
2017 2019 2022
2016-17
to 2020-22
BUSINESS ENVIRONMENT
+0.07
Services Trade
0.83
0.86
0.88
+0.05
Restrictiveness Index
Trade openness (% of GDP)
1.03
1.03
1.02
-0.01
Trade Facilitation Index
0.63
0.70
CO Trade Policy
0.48
0.44
0.50
SMEs in total exports (% of exports)
1.41
1.21
-0.20
SME Policy Index
0.56
0.59
0.65
+0.02
+0.09
FDI net inflows (% of GDP)
0.63
0.54
1.41
+0.78
FDI Restrictiveness Index
1.73
1.70
1.70
-0.03
Private gross fixed capital formation
0.91
0.91
0.85
-0.06
(% of GDP)
New business density (registrations
CO Investment Policy and
Promotion
0.54
0.42
0.54
0.00
0.36
0.31
-0.05
per 1,000 people)
Domestic credit to private sector
0.61
0.63
0.61
0.00
(% of GDP)
CO Access to Finance Policy
0.26
0.38
0.46
+0.20
Bank nonperforming loans
0.86
0.74
0.62
-0.24
(% of total gross loans)
Estimated informal employment
0.33
0.35
0.44
+0.11
(% of total employment)
CO Anti-corruption Policy
0.32
0.34
0.40
+0.08
Control of corruption
0.63
0.61
0.54
-0.07
Convergence with OECD good practice:
•
Overall, policies in Bosnia and Herzegovina are gradually
aligning with OECD good practices in most dimensions of the
business environment cluster.
However, while advancements are promising, they remain
modest; as of 2021, none of the four examined policy areas
had achieved more than 54% convergence with OECD
standards.
The strongest and most consistent progress was made in the
to finance policy dimension, as well as in
policymaking for SMEs, under the SBA assessment.
access
While Bosnia and Herzegovina remains open to trade in
services, it remains restrictive compared to regional peers.
Convergence of policy outcomes:
•
Net inflows of foreign direct investment as a share of GDP strongly improved and surpassed the EU level by over
40% by 2022. Estimated informal employment decreased and made gradual progress in converging to the EU level.
Significant room for improvement remains to boost convergence across all policy outcome indicators. Strengthening
policies to improve SME exports, performance of loans, business creation and control of corruption will be key in this
regard.
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