And while an adequate way of repaying the 110 million mark debt to the Slovenian Viaduct is still being sought, experts rightly ask – who will repay the debt and how? And instead of saying that the money is being invested in the domestic economy and the upcoming sowing, 110 million will simply leave the state treasury due to political negligence and irresponsibility of the leaders of the RS. The debts that are coming due are further worsening the situation. Is a complete economic collapse of the Republika Srpska on the horizon?
The economic situation in Bosnia and Herzegovina is increasingly complex, especially in the RS. Informed and those who deal with analysis indicate that the value of deposits that the RS holds in banks covers only a third or 36 percent of its liabilities, while the Federation covers 76 percent. It is clear – the Federation is twice as liquid as the RS.
“The liquidity of the RS is significantly worse than that of the Federation, but only primarily, taking into account the court and arbitration rulings that have come and that were expected in relation to the Elektroprivreda Slovenije against the Ugljevik Thermal Power Plant and the like. These are such problems that someone in the RS government must ask themselves how they will ensure budget financing,” says economic expert Zoran Pavlović.
If this issue is not taken seriously, bigger problems will follow, experts warn. Therefore, without enough money, the RS will not be able to settle its debts.
“The RS is in a much worse economic situation not only because its debt is higher than the Federation’s, but also because, if a situation were to arise before bankruptcy, the Federation could sell more public assets. The Federation still has very valuable public companies that it could privatize in some case and thereby raise money to repay debts. The RS does not have that, only the Republic’s Elektroprivreda is still worth attention, however, it is also increasingly collapsing with more and more debts and obligations and the huge amount of arbitration disputes that have been lost or are about to be lost, which means new billions of debts,” explains economic expert Igor Gavran.
Unnecessary debts that are coming due, including the current one of 110 million, will go to another country instead of to the domestic economy. All because of political irresponsibility. Will politicians show responsibility when it comes to the domestic economy? The projections are not encouraging. That is why support is needed. The expected intensity of real economic activity in 2025 is relatively modest, according to the worrying projections of the Central Bank.
“Most economic parameters are deteriorating and it is quite logical that the Central Bank expects a deterioration. Some GDP growth is still expected – it is not a projection of a recession or some complete economic catastrophe – but this growth is now even smaller, relatively symbolic. There are a lot of negative predictions, an increase in inflation, which is of particular concern to citizens,” warns Gavran.
Since the beginning of this year, inflationary pressures have started to grow due to the rise in prices of food, electricity and services, the Central Bank states. At this moment, they add, we have neither model nor expert assessments of the effects of increasing the minimum wage.
“The government does not want to give up anything, starting with VAT, which is still the same on Mercedes and basic foodstuffs. This macroeconomic analysis is quite well done and shows all the danger we are in. I wonder if any of the people from the ministries read the reports and these expectations and plans,” says Pavlović.
The government must and should involve the profession in finding adequate solutions in a challenging economic year. Hasty moves and shifting responsibilities are not good. Economic reforms and measures to support the economy certainly are, Federalna writes.
