Press Release No. 14/252

Press Release: Statement at the Conclusion of an IMF Mission to Bosnia and Herzegovina

May 30, 2014

An International Monetary Fund (IMF) mission, led by Ron van Rooden, visited Banja Luka and Sarajevo during May 21-30, 2014, to discuss recent economic developments and policies for the sixth and seventh reviews under Bosnia and Herzegovina’s Stand-By Arrangement (SBA). At the conclusion of the visit, Mr. van Rooden made the following statement:

“The mission expresses its sympathy to all those who were affected by the recent natural disaster. It is clear that the widespread flooding and large number of landslides caused major human suffering, damage, and hardship. The IMF is ready to support Bosnia and Herzegovina in addressing the consequences of this disaster. Although the assessment of the damage is still underway, it is expected that the pace of economic growth will slow down considerably this year. The extent of the slowdown will depend on the speed at which international support for the reconstruction effort can be mobilized.

“Government finances will see a substantial loss in revenues and additional spending needs. To help ensure the continued functioning of the governments, staff reached agreement with the authorities on a set of measures focusing on improving tax collection and safeguarding the integrity of the financial system that, if implemented, would pave the way for consideration of the combined sixth and seventh reviews under the SBA by the IMF’s Executive Board. Given the urgent nature and size of Bosnia and Herzegovina’s financing needs, and subject to approval by the IMF’s management, staff intends to propose to the IMF’s Executive Board that the amount to be made available upon completion of the reviews be increased from SDR 84.55 million (about €95 million) to SDR 169.1 million (about €190 million).

“Staff will continue to work closely with the authorities and the international community in the period ahead, as more information becomes available, to assess and address Bosnia and Herzegovina’s financing needs.”