This year, Bosnia and Herzegovina will spend almost 450 million marks more for the repayment of the state external debt compared to last year. The total external debt of BiH at the end of 2022 amounted to 9.8 billion marks.
Too frequent borrowing by the government, justified by low indebtedness and favorable interest rates, in the end, however, has consequences, and they are an accelerated growth of liabilities that take away more and more money every year, which could be used to support the economy and citizens of BiH, according to experts.
The increase in external debt repayment in 2023 is the result of the maturing obligations for loan repayments that BiH used especially during the pandemic period as an emergency financial intervention, says professor Anto Domazet.
“A special additional blow will be the repayment of the bonds issued by the RS in 2018 on the Vienna Stock Exchange, which are due this year for repayment in the amount of around 330 million marks,” he added.
External debt depends on internal debt. Until the relationship between who owes whom is not known within the country, this burdens the external debt, says professor and doctor Željko Šain.
“The problem is that we invested that money in something that does not give an appropriate profit and has no additional value, and that is the biggest problem why we have problems with debt repayment.”
BiH’s external debt has a growing trend, the balance is not equal between the entities, much faster borrowing has been taking place in the RS lately, however, all of these are obligations of BiH and all of this affects our credit rating and our total burden, according to Željko Sain, professor of the Faculty of Economics of UNSA.
“The special problem is that a large part of this debt relates to loans that are not used, or not used in the right way, or not used at all, so we pay penalties for them. Let’s say, the last figure we paid was almost seven million BAM for unused credit funds.”
In order for the existing debt to be serviced, it is necessary for the state to ensure that this money is really put to work, so that we can get a return as soon as possible from the invested funds and enable debt repayment, and that further borrowing is really done when it is necessary and when it is the only a possible source of financing and that the development of the economy and the support of the economy enable us to be able to pay off this loan, according to Igor Gavran, economic analyst.
