The Executive Board of the International Monetary Fund (IMF) on Monday completed the sixth and seventh reviews of Bosnia and Herzegovina’s (BiH) economic performance under a program supported by a Stand-By Arrangement (SBA).
The Executive Board also approved an augmentation of the SBA by SDR 84.55 million (about €95.7million) to meet the country’s urgent balance of payments need caused by severe floods in May 2014.
The completion of the reviews and the augmentation enables a total disbursement of an amount equivalent to SDR 169.1 million (about €191.4 million), which will bring total disbursements under the arrangement to SDR 422.75 million (about €478.5 million).
The Board also granted the authorities’ request for modification of the end-June 2014, end-September 2014, and end-December 2014 performance criteria on the fiscal balances (net lending) of the central government of the Federation of Bosnia and Herzegovina (FBiH) and the Republika Srpska (RS) to reflect the impact of the natural disaster on government finances.
The 24-month SBA was approved on September 26, 2012, and was extended for nine months and augmented by SDR 135.28 million (about €153.1 million) on January 31, 2014 to meet additional financing needs that arose mainly in late 2014.
The total arrangement will reach SDR 558.03 million (about €631.6 million, or 330 percent of quota) after the two augmentations.
“The Executive Board expressed its regret at the major damage and hardship caused by the recent natural disaster that affected Bosnia and Herzegovina. The economy had been on a good track prior to the disaster, with growth picking up and external imbalances narrowing. The impact of the disaster has made the economic outlook more uncertain. Growth is expected to slow down appreciably and the current account deficit to widen substantially. The donor conference planned for mid-July will be critical to mobilize international donor support for the reconstruction,” stated Mr. David Lipton, First Deputy Managing Director and Acting Chair of the institution, announced the IMF in the press release.