Bosnia and Herzegovina (BiH) faced a significant political and institutional crisis due to two main factors: the Republika Srpska leadership undermining the constitutional order as well as sovereignty of the state, and the Croatian Democratic Union causing political and institutional blockades. c
In terms of economic development, the post-pandemic recovery took root in 2021-22 and is projected to continue in 2023. Inflation has started to recede, and international financial institutions expected further growth in external trade and foreign direct investment. Nonetheless, the issue of high emigration, notably among the young and educated population, remains an ongoing concern.
Despite the limited progress in implementing reforms, the Council of the EU granted BiH candidate status, a decision that was primarily influenced by the war in Ukraine. However, it remains uncertain whether the ruling coalition will genuinely commit to a reform policy.
