Although economic activity in developed countries has slowed down in recent years, remittances sent by the diaspora to Bosnia and Herzegovina continue to grow and remain one of the most stable sources of inflow of foreign funds.
Under the conditions of the currency board, as stated by the Central Bank of Bosnia and Herzegovina, such stable foreign exchange flows are of crucial importance for preserving monetary stability and strengthening confidence in the domestic currency.
According to the available data, in the nine months of 2025, personal transfers (remittances from abroad) in BiH amounted to 3.26 billion BAM, which is about 7.8 percent of the gross domestic product. This amount has a direct impact on the disposable income of households, their consumption and standard of living.
Remittances are especially important for households with lower incomes, for whom they often represent a key source of financial stability.
Total current transfers in 2023 amounted to 5.26 billion BAM, of which 3.79 billion BAM refers to remittances from abroad. In 2024, total current transfers reached 5.69 billion BAM, and remittances from abroad accounted for 4.16 billion BAM.
“Remittances from abroad significantly affect cash flows in BiH, the living standard of residents, as well as the foreign currency reserves of the CBBH.
Remittances represent a stable source of inflow of foreign funds and make up an important part of the total financial flows in the country,” the CBBH told Fena news agency.
In addition, the inflow of remittances has a positive effect on the foreign currency reserves of the CBBH. Given that Bosnia and Herzegovina is a net importer on the international goods market, remittances help to increase income on the current account and reduce its deficit to a significant extent.
The CBBH does not have data from which countries BiH receives the most remittances because there is no official estimate by country yet, but it can be said that they mainly come from the countries of Western Europe, Scandinavia and North America where the BiH diaspora is most present.
“Given the high share of labor remittances in GDP, they are taken into account primarily as a stable source of foreign exchange inflows, which positively affects the balance of payments and the level of foreign exchange reserves of the CBBH. This strengthens monetary stability and the maintenance of the currency board. The CBBH has a mandatory reserve as the only instrument of monetary policy at its disposal, but it monitors the movement of remittances in order to assess their effects on the money supply, consumption and inflationary pressures,” the CBBH points out.
They noted that in BiH, remittances are an important factor in the economy because they increase income and mainly encourage consumption. In development programs, with appropriate measures, they should be directed towards investments and production sectors in order to contribute to sustainable economic growth. The CBBH added that there are estimates of transfers received through informal channels and that they are included in the total data on transfers that are published as such.
“The CBBH is working intensively on introducing a system for instant payments with the aim of making payments faster, safer and cheaper, both for citizens and for the economy. By introducing instant payments, the CBBH directly encourages the use of electronic payment channels, bearing in mind that these are electronic payments that are processed in real time, which enables faster and safer payments, with the possibility of using QR codes in applications,” the CBBH pointed out.
Joining the SEPA area, which the CBBH is coordinating and intensively working on to prepare the assumptions for the operationalization of that arrangement, also implies that there will be significantly faster euro cross-border payments, with lower transaction costs, which will have an extremely positive impact on the economy and citizens.
This process also implies a change in the legal framework that will enable the stimulation of the competitiveness of payment service providers, as well as greater innovation and the creation of even more significant mechanisms to encourage digitization in the financial sector in general. In the context of remittances from the diaspora, their inflow will be significantly facilitated, as they will be able to be sent faster and cheaper.
As part of the financial education of the population, which it carries out intensively, the CBBH also points to the latest trends in digital, cashless payments available to the citizens of BiH.
In this regard, the CBBH, in cooperation with the World Bank, published a Guide for digital payments, which contains information on market trends related to mobile and contactless payments and its characteristics, including different approaches to digital payments in BiH, basic types of digital payments, technical requirements and user obligations, as well as information on fraudulent or misleading practices that payment users should be aware of.
The preparation of an innovative guide is underway, which will be an important educational material, and will include content and the latest trends in the field of digital payments, and which will include information about instant payments and payments within the framework of SEPA.
