Press Release No. 14/433

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

September 19, 2014

An International Monetary Fund (IMF) mission, led by Mr. Ron van Rooden, visited Banja Luka and Sarajevo during September 10-19, 2014, to discuss recent economic developments and policies for the eighth review under Bosnia and Herzegovina’s Stand-By Arrangement (SBA). At the conclusion of the visit, Mr. Ron van Rooden made the following statement:

“The economic recovery—which gained momentum in 2013 on the back of strong exports and broad-based industrial growth—appears to be more resilient than previously thought to the impact of the natural disaster that hit Bosnia and Herzegovina in May. However, disbursements of donor support for the reconstruction effort—beyond the immediate emergency assistance—have so far been limited, slowing the rehabilitation process. The prospects for a rapid recovery in the near term remain mixed. While growth is expected to reach close to 1 percent this year, the outlook is subject to considerable uncertainty. Unemployment is likely to remain high as many businesses were destroyed or suffered severe damage.

“The authorities need more time to implement policies that had been agreed under the SBA. This includes policies aimed at reining in government spending not directly related to addressing the impact of the floods; improving tax compliance and fighting tax fraud; and strengthening financial sector stability and enhancing banking supervision. We hope to see strong progress in the implementation of these policies in order to pave the way for consideration of the eighth review under the SBA by the IMF Executive Board.”