Bosnia to take a New Credit from IMF in January next Year

The Chairman of the Council of Ministers of Bosnia and Herzegovina, Zoran Tegeltija, expressed the full commitment of all levels of government in BiH to expect the successful completion of negotiations by mid-December this year, and the conclusion of a new arrangement in January 2021, despite the difficult work of the Mission due to the coronavirus pandemic.

During the meeting with IMF representatives held on Friday, they discussed the planned activities and measures under the new arrangement with this international financial organization, as well as the reform areas that will be covered by the new arrangement.

The Council of Ministers of BiH recently adopted the Information on the state of public indebtedness of Bosnia and Herzegovina and until June 30 this year, the public debt of BiH amounted to 12 billion and 175.22 million BAM, of which the external debt is eight billion and 664.75 million BAM (71.17 percent), while the internal debt is three billion and 510.47 million BAM (28.83 percent) of total public indebtedness.

The share of BiH’s public debt in gross domestic product (GDP) is 35.5 percent. In the total state of public indebtedness, the Federation of BiH participates with 50.75 percent, the Republika Srpska with 48.24 percent of the BiH institution with 0.47 percent and the Brcko District of BiH with 0.54 percent.

From this information, it could be concluded that the entities are approximately equally indebted. In general, that is true. But the debt burden is actually viewed in proportion to the size of an economy most commonly measured by gross domestic product (GDP). According to the data of the entity statistical institutes, the Federation has more than twice the GDP of the RS, writes

Gross domestic product in current prices in the Federation of BiH in 2019 amounted to 23.13 billion BAM, according to previously published data from the Federal Bureau of Statistics. The gross domestic product of the Republika Srpska in 2019, expressed in current prices, amounted to 11.23 billion BAM, according to the data of the Statistical Office of the Republika Srpska. From that, it can be concluded that the Republika Srpska is twice as burdened with debt as the FBiH.

Otherwise, no entity still falls into the category of high indebtedness. Much bigger problems than debt in BiH are weak economic activity, bad business environment, high unemployment, corruption, etc.

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