The FBiH Minister of Trade, Amir Hasicevic, is confident that the decision by the FBiH Government to raise the minimum wage to 1,000 Bosnian marks (€511) will not harm the economy.

“This decision by the FBiH Government is a bold move that has initiated significant processes. For 25 years, we’ve had a flawed system with low wages and high contributions, and many ignored unpaid contributions. That paradigm is now changing. I am convinced there has never been more focus on workers’ rights and dignity than there is today,” Hasicevic stated in an interview with FENA.

He highlighted that attention is now turning to tackling the grey economy, which will lead to higher wages and lower contributions.

“The FBiH Government is working on a set of fiscal laws to help reduce the grey economy. I’d also like to remind everyone that we’ve already passed a new Law on Internal Trade, and next week, the Draft Law on Price Control will be presented to parliament. Additionally, we are finalising the E-Commerce Law. It’s worth noting that online trade alone costs the Federation of BiH between 200 and 300 million marks (€102–153 million),” he pointed out.

When asked whether the decision to raise the minimum wage could lead to job cuts in the trade sector, where many workers earn minimum wages, Hasicevic dismissed the notion as unlikely.

“As you know, the FBiH Employers’ Association and the Trade Union have been our partners in all processes since the beginning of our mandate. In every discussion, employers consistently highlighted the shortage of workers as one of their biggest challenges. Therefore, it’s illogical for those same employers, who need hundreds of new workers, to lay off their existing employees. Speaking as someone who comes from the private sector and as an employer myself, I can say with certainty that no employer would let go of a worker they genuinely need,” he emphasised.

Hasicevic also noted that the FBiH Government plans to introduce measures to assist small and medium-sized enterprises during this transition. He further mentioned the potential for larger companies that raise wages above 1,000 marks (€511) to benefit from a tax-free portion of up to 450 marks (€230).

Addressing concerns about inflation and possible price increases due to higher labour costs, Hasicevic expressed confidence that significant disruptions were unlikely.
“Prices are dictated by both producers and suppliers. I’d like to remind everyone that we are largely import-dependent, so when prices rise on the global market, they inevitably increase here too. At the FBiH Ministry of Trade, we monitor prices daily.

For instance, when the global price of wheat increased by 15%, our bread producers announced a 20% price hike. After discussions, they reverted to the old prices,” Hasicevic explained.

He added that the average inflation rate in the Federation of BiH last year was 1.43%, with projections for this year ranging between 2% and 3%.

“It’s challenging to predict with certainty since inflation in other countries directly impacts our economy,” he noted.

Given the inflation and rising prices, calls to reduce the VAT rate on basic necessities have been increasing. However, Hasicevic pointed out that this issue falls under the jurisdiction of state-level authorities.

“We hope this matter will be addressed soon, as countries in the region and the European Union already have differentiated VAT rates. I firmly believe Bosnia and Herzegovina deserves similar measures,” concluded Minister Hasicevic.