•                                                                                                    Bosanski

IMF Staff Concludes Mission to Bosnia and Herzegovina

November 21, 2017

End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board.
  • The economy is seeing a cyclical recovery, though weaker than that in the rest of Eastern Europe.
  • Implementation of the program has been much slower than expected.
  • A number of actions is needed for the first review of the IMF-supported program.

An International Monetary Fund (IMF) mission, led by Nadeem Ilahi, visited Sarajevo and Banja Luka during November 7-21, 2017, to discuss recent economic developments and medium-term outlook for the 2017 Article IV consultation, and policies for the first review of the Bosnia and Herzegovina economic program, supported under the IMF’s Extended Fund Facility (EFF). At the conclusion of the mission, Mr. Ilahi made the following statement:

“The economy of Bosnia and Herzegovina is seeing a cyclical recovery, though one that is weaker than that in the rest of Eastern Europe. Exports and remittances have been increasing and inflation is expected to pick up in 2017. While macroeconomic stability has been maintained, the program’s main aim of boosting economic growth and creating jobs remains largely unaddressed.

“The mission took note of the progress in preparing fiscally responsible draft 2018 budgets at the entity level, and encourages the authorities to complete the process for the Institutions of Bosnia and Herzegovina in a timely manner, and in line with IMF staff recommendations.

”There has been some progress on structural reforms, particularly at the entity level. However, implementation of some of the key measures under the program has been much slower than expected. The prior actions for the first review include adoption of the 2018 entity budgets, as well as:

“The adoption by the BiH parliament of legal amendments to increase excise tax rate on fuels. This is necessary to unlock the largest package of external financing available in recent times for critical public infrastructure investments. Continued delay has slowed the economic recovery and affects prospects for faster growth and job creation in future.

“The adoption by the BiH parliament of the new Law on Deposit Insurance. Entity level banking and banking agency laws have already been passed, and the absence of a new deposit insurance law delays the modernization of the country’s banking sector legislation.

“The initiation by the FBiH government of the due diligence of telecommunication companies, BH Telecom and HT Mostar.

“The endorsement by the Indirect Tax Authority Governing Board of the quarterly indirect tax allocation coefficients and settlement of inter-entity debts.

“To bring the program back on track, the completion of these prior actions in the coming weeks is essential. The IMF staff stands ready to assist the authorities.”

IMF Communications Department

PRESS OFFICER: Wiktor Krzyzanowski

Phone: +1 202 623-7100Email: MEDIA@IMF.org