It is becoming increasingly clear that the BiH authorities will not receive more money from the expanded arrangement with the International Monetary Fund (IMF), which expires in half a year, and from Srpska say they are not negotiating with that financial institution for new borrowings.
An extended arrangement with the IMF worth KM 1.07 billion was concluded by the BiH authorities in September 2016 and since then two tranches of KM 153.78 million and KM 145 million have been disbursed.
– The extended arrangement, which has not been implemented since June 2018, ends in September 2020, and it is not certain that new tranches will be transferred under this arrangement – said IMF Resident Representative in BiH Andrew Juel.
He stated that this international financial institution is ready to engage with the new program, provided that governments at all levels can implement reforms.
He also added that the Republic of Srpska and the Federation of BiH regularly service their obligations to the IMF.
Srpska officials say they are not currently negotiating with the IMF regarding a new debt.
– We are not in negotiations with the IMF. We are working on the budget arrangement with the domestic banks, in accordance with the decision of the RS National Assembly – Republic of Srpska Finance Minister Zora Vidović said.
Economists point out that earlier borrowing from the IMF, in addition to favorable financing conditions, reflected the confidence of international institutions in the economic policies of a country, and at the same time made foreign investors more secure when it came to investing in the economies of those countries.
– Recently, however, public institutions can borrow at affordable interest rates on the domestic financial market. This is also evident from the fall in the cost of borrowing at which the RS Government has borrowed in recent years. That aspect and that good side of the IMF arrangement is no longer expressed. In addition, debt projections were made without any new loans with the IMF – said the Executive Director of the Association of RS SWOT Economists, Saša Grabovac.
He stressed that countries with IMF arrangements have a slightly better image only in the financial international public.
– Given our good indicators when it comes to the issue of public debt to GDP and other indicators, we believe that this is not a major omission – said Grabovac.
The Federation of Bosnia and Herzegovina has previously been told to operate without the IMF and not to negotiate new duties.