B&H to take a Loan of 900 million BAM from the IMF?

debtB&H will take a loan of 900 million BAM from the IMF, according to the media after a meeting of the Entity Prime Ministers and Chairman of the Council of Ministers in Banja Luka.

Officially, they only stated they have defined a common platform for negotiations with the IMF and the World Bank. Government of Republika Srpska neither confirmed nor denied allegations of new borrowing.

Slobodna Bosna claims that for the first time after Dayton, B&H will not be negotiating on stand-by arrangement, but it will take the loan under the so-called EFF conditions. They are granted only to countries that are ready on deep structural reforms and removing the causes of fiscal instability, according to economists.

“Extended Fund Facility the IMF approves for the countries that are in trouble with the deficit and the imbalance of imports and exports,” said economic analyst Zoran Pavlovic.

In short, B&H requested a loan of 900 million BAM on 12 years from the IMF. It would be retreated, according to media, over the next 3 years, and in turn the authorities of B&H should undertake 24 reforms to permanently eliminate the causes of budget deficit.

Money from the stand-by arrangement is mainly used for short-term patching of the budget holes, which economists vividly describe as taking painkillers for toothache. For long-term solution to these problems entity governments have to finalize the privatization process and reduce budgetary expenditures. Everything will be discussed next week in Washington, as reported by ATV.


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