Nine out of ten German entrepreneurs would invest in BiH again

A survey by the Representation of the German Economy in BiH has shown that despite the poor economic situation, nine out of ten respondents would invest in BiH again, reports the BiH news agency Patria.

The assessment of the economic situation in Bosnia and Herzegovina by German and other investors is again quite modest this year. However, companies are quite optimistic regarding their own business operations. This emerges from the results of the Economic Survey 2015, which the Representation of the German Economy in Bosnia and Herzegovina conducts annually among members of the Wirtschaftsverein BiH association and other companies with German and domestic capital.

Survey results

The general economic situation in BiH is still assessed as poor by the majority of respondents, but the outlook for the future is less pessimistic than in the previous year. Companies are mostly satisfied with their own business situation and expect an increase in turnover. Half of the respondents announced investment plans and the creation of new jobs in 2015.

In the context of the investment climate, the BiH workforce was again rated positively, while corruption and crime in the country, complicated public administration, the tax system and institutions, as well as political and social instability, cause great concern.
The vast majority of surveyed companies still consider Bosnia and Herzegovina a good location for business, and the relative rating compared to other countries is also much better than in previous surveys.

Respondents believe it would be useful and important to implement economic reforms in administration and in the areas of tax and labour law. Although 2/3 of respondents assess the current state of the economy in BiH as poor, compared to the results of previous years, optimism is emerging. Regarding the general economic outlook for 2015 compared to the previous year, 22% of respondents rate it as better. In last year's survey, only 3% of companies expected an improvement in the general economic situation.

When it comes to the development of the situation in their own sector, 38% of survey participants expect an improvement compared to the previous year, which is the best percentage result since 2009. Almost twice as many respondents compared to the previous year assess their own business situation as good (34% compared to 18% last year). 64% of companies expect an improvement in business development in the current year compared to the previous year.

These positive assessments are also reflected in the expected employment trend and planned investments. Thus, 52% of the companies that participated in the survey plan to create new jobs. This is also the highest percentage since 2009. For comparison, in last year's survey, 34% of respondents expected an increase in the number of employees, while this figure was 28% in 2013. Every second company that participated in the survey plans to increase investments compared to the previous year, while 38% of companies do not expect any changes.

The survey also showed that exports are of great importance for companies, with 40% of respondents expecting an increase in export activities in 2015. It is significant that 88% of all respondents consider access to the German market important or extremely important.

Almost all survey participants (98%) consider the process of approaching the European Union important or very important. It can be concluded that companies expect from the process of BiH's integration into the EU better access to foreign markets, and above all, an improvement in the framework conditions for doing business in BiH. The disadvantages that respondents cited for BiH as an investment location are: lack of political and legal security, complicated administration, stagnation of reforms, taxes and other levies, the existence of corruption, and the education system. The particular advantages highlighted are the favourable geographical location for investors, the workforce, and natural resources.