Sarajevo City Review

Cities

About This Report

Nov 2017

Sarajevo is the capital of Bosnia and Herzegovina, and is also the largest economic and cultural centre of a country still deeply divided in two entities. Culturally rich, the city lags in terms of wealth behind its peers in the former Yugoslavia and Eastern Europe, mostly due to the 1992-1995 war, a brain drain and its weak production base. Sarajevo generated 15% of Bosnia and Herzegovina's GDP in 2016. Thanks to higher labour force participation, it produced 38% higher per capita GDP than the

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Sarajevo City Review

SARAJEVO HIGHLIGHTS

Labour productivity in Sarajevo is among the lowest in Eastern Europe. In 2016, it was 25% lower than in Skopje (which is the least productive of the other former Yugoslav major cities) and 5.9% lower than in other parts of Bosnia and Herzegovina. The low educational profile and bureaucratic barriers in Sarajevo have prevented the development of high value-added industries, such as business services or export-generating manufacturing industries. The exports-to-GDP ratio was only 12% in 2016 in Sarajevo, compared to 52% in Skopje.

High unemployment and low labour force participation rates

Sarajevo suffers from high unemployment and low labour force participation rates. The situation is, however, even worse in other parts of Bosnia and Herzegovina: the labour force participation rate was only 62% of the 15-64-year, working-age, population in Sarajevo in 2016, well above the 44% rate elsewhere in Bosnia and Herzegovina. This lifted the city's average household disposable income 15% above that elsewhere in Bosnia and Herzegovina, and close to the figure in Skopje (only 1.5% below), in 2016.

High proportion of consumer expenditure allocated to food

Having higher disposable incomes than those in other parts of Bosnia and Herzegovina, households in Sarajevo spent, in 2016, 11% more on goods and services (excluding transport and housing). However, incomes are low in absolute terms, resulting in a high share of consumer expenditure being dedicated to food: 31% of total expenditure in 2016, the second greatest share in Eastern Europe after Minsk (34%).

In absolute value, Sarajevo had among the lowest cost of living in Eastern Europe

Consumer expenditure on transport and housing per household accounted for 26% of the total budget in Sarajevo, as well as elsewhere in Bosnia and Herzegovina in 2016, while in absolute value, it had among the lowest cost of living in Eastern Europe (33% lower than in Skopje).

Sarajevo City Review

SARAJEVO REVIEW AT A GLANCE

Understanding Sarajevo Review structure
Chart 1 Overview
Key facts on Sarajevo
Summary 1 Key Facts On Sarajevo 2011, 2016, 2021

SARAJEVO HIGHLIGHTS

History
Delimitation of the metropolitan region
Chart 2 Map Of Sarajevo Metropolitan Area
Main business districts

ECONOMY OF THE CITY

Industrial make-up
Chart 3 Industrial Composition Of Sarajevo 2016
Chart 4 Labour Productivity: Selected Cities 2016
Recent developments and outlook
Chart 5 Dynamics Of Real GDP In Sarajevo, Bosnia-Herzegovina And Other Cities In Eastern Europe, 2011-2021
Summary 2 Labour Market Changes In Sarajevo 2011, 2016

CONSUMER PROFILE

City demographics
Chart 6 Population By Age 2016
Chart 7 Drivers Of Population Growth In Sarajevo 2011-2016
Household income
Chart 8 Household Distribution By Income In Sarajevo 2016 And 2021

CONSUMER EXPENDITURE

Structure of household budget
Chart 9 Comparison Of Household Expenditure In Sarajevo And Bosnia-Herzegovina, 2016
Summary 3 Sarajevo Household Budget Structure By Consumer Expenditure Item, % of total, 2011, 2016, 2021
City lifestyle
Bosnia's Tourism, An Industry In Its Infancy
More Internet Connections, But Low Speed
City affordability
Housing
Chart 10 Household Expenditure On Housing: Selected Cities 2016
Transport
Chart 11 Household Expenditure On Transport: Selected Cities 2016

DEFINITIONS

APPENDIX

Summary 4 GDP Development, 2011, 2016, 2021
Summary 5 GDP By Origin, Current Prices, US$, Million, 2011-2016
Summary 6 Population And Labour Force, 2011-2016
Summary 7 Employed Population By Economic Sector, % of total, 2011-2016
Summary 8 Population By Sex And Broad Age Groups, ‘000, 2011-2016
Summary 9 Population Growth, 2011-2016
Summary 10 Forecast Population Growth
Summary 11 Population By Educational Attainment, 2011-2016
Summary 12 Structure Of Consumer Expenditure By Main Category, 2011-2016
Summary 13 Consumer Expenditure By Main Category, Per Household, Constant (2016) Prices, US$, 2011, 2016, 2021
Summary 14 Households By Income Band, % Of Total, Constant (2016) Prices 2011, 2016, 2021
Summary 15 Households By Income Band, ‘000, Current Prices 2011-2016
Summary 16 Inflation, 2011-2016
Summary 17 Transport Indicators, 2011-2016
Summary 18 Air Pollution, Concentration In Micrograms Per Cubic Metre, 2011-2016
Summary 19 Possession of Consumer Durables, % of Households, 2011, 2016, 2021