How did the Bosnian War affect Bosnia and Herzegovina’s economy?

The 1992–1995 Bosnian War had a devastating impact on the economy of Bosnia and Herzegovina, leading to widespread destruction and the collapse of the official economy.1

During the conflict, the country experienced severe economic instability characterized by hyperinflation, insolvent banks, and critical shortages of food and medicine. As imports and exports plummeted and prices for essential goods like oil surged, the formal economy disintegrated, forcing the population to rely on a swelling black market or informal sector. Furthermore, the war severely damaged the nation's industrial base, leaving the country struggling to reinvigorate manufacturing production in the postwar period.12

Following the war, international financial organizations played a critical role in reconstruction efforts, which helped stabilize inflation and foster growth in the gross domestic product. However, long-term challenges persist, including high unemployment, an incomplete privatization process, and a significant reliance on the informal economy and remittances from citizens working abroad.1