Government of RS to take a Loan of 50 Million BAM again?

The Government of Republika Srpska (RS), at its session in late July, has made a decision on taking the second long-term credit line with domestic creditors in the amount of 50 million BAM. AS stated in the decision, the inflow of money on this basis is planned from the budget of RS for 2017.

RS is to borrow this loan for the period of six years, with a maximum interest rate of up to four percent a year.

“The Ministry of Finance is to inform the Government of RS of the public procurement procedure, which will issue a decision on the debt,” is stated in the RS Government decision.

A member of the Association of Economists of “SWOT” Milos Todorovic says that the loan is likely to go into consumption, but that it is not good, especially with the interest rate which is not favorable.

“The four-percent interest rate is high, especially if it is considered that the interest rates have fallen so much lately. Even high interest rates of 3.5 percent are high. Also, there is a problem of the reason why RS is taking the loan. If we look at the purpose of borrowing, and we are witnessing that in the past, RS was mostly taking the debt  for consumption, then that is certainly not justified, “- Todorovic said.

The decision on the first long-term debt with domestic banks was made by the RS Government in mid-March, taking 50 million BAM.

(Source: faktor)

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