{
  "title": "Press Release: IMF Executive Board Approves US$1.57 Billion Stand-By Arrangement for Bosnia and Herzegovina",
  "publication": "IMF News, July 8, 2009",
  "sourceUrl": "https://www.imf.org/en/news/articles/2015/09/14/01/49/pr09258",
  "canonical": "https://www.imf.org/en/news/articles/2015/09/14/01/49/pr09258",
  "overlayPath": "/en/news/articles/2015/09/14/01/49/pr09258/index.md",
  "summary": "Arrangement type and size: 36-month Stand-By Arrangement for SDR 1.01 billion (about US$1.57 billion).",
  "publishDate": "2009-07-08",
  "sections": [
    {
      "heading": "Executive Board approval and financing",
      "content": "- Arrangement type and size: 36-month Stand-By Arrangement for SDR 1.01 billion (about US$1.57 billion).\n- Immediate availability: SDR 182.63 million (about US$282.37 million) immediately available; remainder in installments subject to quarterly reviews.\n- Purpose: To support an economic program designed by the authorities to mitigate the effects of the global financial crisis."
    },
    {
      "heading": "Authorities’ program objectives",
      "content": "- Reduce the structural fiscal balance to limit the government's financing needs and bring public finances on a sustainable medium-term path.\n- Reestablish public wage restraint.\n- Support adequate liquidity and capitalization of banks.\n- Secure sufficient external financing and improve confidence.\n- Broader aims: Safeguard the currency board, consolidate public finances, maintain adequate liquidity and capitalization of banks, secure sufficient external financing, restore confidence, and position the economy for a strong recovery and medium-term sustainable growth and convergence with the European Union."
    },
    {
      "heading": "Deputy Managing Director Takatoshi Kato — summary of remarks",
      "content": "- Recent performance: Solid growth in recent years reflecting reforms in key sectors, benefits of the currency board, and a favorable external environment.\n- Imbalances and causes: Rapid credit expansion funded by large capital inflows drove domestic demand past sustainable levels; loosening of fiscal and income policies in 2008 aggravated overheating and left public finances vulnerable.\n- Policy orientation: Emphasis on safeguarding the currency board; determined implementation of fiscal, income, and financial sector policies seen as the best guarantee of continued viability of the currency board.\n- Fiscal stance: Fiscal policy strikes an appropriate balance between near-term adjustment and reforms for medium-term sustainability; containment of recurrent expenditure to create space for public investment and social spending; better targeted social programs recommended.\n- Financial sector measures: Welcome steps to maintain confidence in the banking system — establishment of a standing committee for crisis prevention and management, strengthened capacity for stress tests; foreign parent banks’ commitment to maintain exposures and enhance subsidiaries’ capital critical; need to bolster deposit insurance framework and improve bank resolution procedures.\n- Communication: Given risks to the external environment and challenges implementing fiscal policies, clear communication of policy objectives and effective public engagement on reform benefits are of prime importance.\n- Outlook: Authorities’ strong commitment to appropriate policies and measures needed to achieve program objectives bode well for a successful outcome."
    },
    {
      "heading": "Recent economic developments (narrative)",
      "content": "- Growth and inflation (2003–08): Growth averaged 6 percent per year during 2003-08 while inflation remained low.\n- Capital inflows and imbalances: Bank privatizations, financial sector reforms, and improved growth prospects attracted large capital inflows; capital inflows drove a domestic demand boom, worsening internal and external imbalances (sharp rise in bank credit, acceleration of core inflation, widening current account deficit).\n- Crisis impact (late 2008 onward): Stock market indices slumped, international reserves began to decline, bank credit growth halted, financial soundness indicators deteriorated; construction activity faltered and layoffs rose; revenue weakened while expenditure (driven by increases in wages and social benefits) rose sharply.\n- Fiscal outcome: General government deficit widened to 4 percent of GDP from a near-balance in 2007."
    },
    {
      "heading": "Program summary (narrative)",
      "content": "- Design: Program designed to safeguard the currency board and cushion effects of the deteriorating external environment while redressing fiscal imbalances and strengthening the financial sector.\n- Medium-term aim: Help position the economy for a strong recovery when the global environment improves and set the stage for sustainable growth and EU convergence by providing a framework for structural supply-side reforms and safeguarding competitiveness."
    },
    {
      "heading": "Selected economic indicators, 2005–09",
      "content": "- Real GDP (Percent change)\n  - 2005: 3.9\n  - 2006: 6.9\n  - 2007: 6.8\n  - 2008: 5.5\n  - 2009 Est. Proj.: -3.0\n- CPI (period average) 1/\n  - 2005: 3.6\n  - 2006: 6.1\n  - 2007: 1.5\n  - 2008: 7.4\n  - 2009 Est. Proj.: 1.6\n- Money and credit (end of period)\n  - Broad money\n    - 2005: 18.2\n    - 2006: 24.7\n    - 2007: 21.6\n    - 2008: 4.3\n    - 2009 Est. Proj.: 0.6\n  - Credit to economy\n    - 2005: 27.5\n    - 2006: 23.3\n    - 2007: 28.1\n    - 2008: 20.8\n    - 2009 Est. Proj.: 0.0\n- General government budget (In percent of GDP)\n  - Revenue\n    - 2005: 45.5\n    - 2006: 47.4\n    - 2007: 45.8\n    - 2008: 45.0\n  - Expenditure (on a commitment basis)\n    - 2005: 44.7\n    - 2006: 45.2\n    - 2007: 47.5\n    - 2008: 49.9\n    - 2009 Est. Proj.: 49.7\n  - Overall balance\n    - 2005: 0.8\n    - 2006: 2.2\n    - 2007: -0.1\n    - 2008: -4.0\n    - 2009 Est. Proj.: -4.7\n- External public debt (In percent of GDP)\n  - 2005: 25.6\n  - 2006: 21.2\n  - 2007: 18.3\n  - 2008: 17.1\n  - 2009 Est. Proj.: 21.5\n- NPV of external public debt (In percent of GDP)\n  - 2005: 19.6\n  - 2006: 16.2\n  - 2007: 14.0\n  - 2008: 13.0\n  - 2009 Est. Proj.: 16.5\n- Total public debt (In percent of GDP)\n  - 2005: 22.0\n  - 2006: 29.8\n  - 2007: 27.8\n  - 2008: 34.7\n- Balance of payments (In millions of euros)\n  - Exports of goods and services\n    - 2005: 2,832\n    - 2006: 3,589\n    - 2007: 4,062\n    - 2008: 4,580\n    - 2009 Est. Proj.: 3,843\n  - Imports of goods and services\n    - 2005: 6,393\n    - 2006: 6,493\n    - 2007: 7,656\n    - 2008: 8,688\n    - 2009 Est. Proj.: 7,050\n  - Current account balance (In millions of euros)\n    - 2005: -1,555\n    - 2006: -816\n    - 2007: -1,401\n    - 2008: -1,842\n    - 2009 Est. Proj.: -1,201\n  - Current account balance (In percent of GDP)\n    - 2005: -18.0\n    - 2006: -8.4\n    - 2007: -12.7\n    - 2008: -14.7\n    - 2009 Est. Proj.: -9.7\n  - Gross official reserves (In millions of euros)\n    - 2005: 2,145\n    - 2006: 2,761\n    - 2007: 3,425\n    - 2008: 3,219\n    - 2009 Est. Proj.: 2,932\n  - Reserves (In months of imports)\n    - 2005: 4.0\n    - 2006: 4.7\n  - External debt service (In millions of euros)\n    - 2005: 267\n    - 2006: 412\n    - 2007: 326\n    - 2008: 364\n    - 2009 Est. Proj.: 433\n  - External debt service (In percent of exports of goods and services)\n    - 2005: 9.4\n    - 2006: 11.5\n    - 2007: 8.0\n    - 2008: 11.3\n- Exchange rate regime: Currency board since August 1997\n- Exchange rate, July 8, 2009: 1KM = Euro 0.5113\n- Real effective exchange rate (2000=100, increase=appreciation) 2/\n  - 2005: 87.8\n  - 2006: 89.8\n  - 2007: 88.2\n  - 2008: 90.1\n\nPress Release No.09/258, July 8, 2009 — International Monetary Fund\n\n---\n\n\n References\n\n- Bosnia and Herzegovina and the IMF\n- Press Releases\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2015/09/14/01/49/pr09258"
    }
  ],
  "bullets": [
    "[Markdown version](/en/news/articles/2015/09/14/01/49/pr09258/index.md)",
    "[Structured JSON version](/en/news/articles/2015/09/14/01/49/pr09258/index.json)",
    "[Bundle manifest](/en/news/articles/2015/09/14/01/49/pr09258/bundle-manifest.json)",
    "Published: July 8, 2009",
    "Arrangement type and size: 36-month Stand-By Arrangement for SDR 1.01 billion (about US$1.57 billion).",
    "Immediate availability: SDR 182.63 million (about US$282.37 million) immediately available; remainder in installments subject to quarterly reviews.",
    "Purpose: To support an economic program designed by the authorities to mitigate the effects of the global financial crisis.",
    "Reduce the structural fiscal balance to limit the government's financing needs and bring public finances on a sustainable medium-term path.",
    "Reestablish public wage restraint.",
    "Support adequate liquidity and capitalization of banks.",
    "Secure sufficient external financing and improve confidence.",
    "Broader aims: Safeguard the currency board, consolidate public finances, maintain adequate liquidity and capitalization of banks, secure sufficient external financing, restore confidence, and position the economy for a strong recovery and medium-term sustainable growth and convergence with the European Union.",
    "Recent performance: Solid growth in recent years reflecting reforms in key sectors, benefits of the currency board, and a favorable external environment.",
    "Imbalances and causes: Rapid credit expansion funded by large capital inflows drove domestic demand past sustainable levels; loosening of fiscal and income policies in 2008 aggravated overheating and left public finances vulnerable.",
    "Policy orientation: Emphasis on safeguarding the currency board; determined implementation of fiscal, income, and financial sector policies seen as the best guarantee of continued viability of the currency board.",
    "Fiscal stance: Fiscal policy strikes an appropriate balance between near-term adjustment and reforms for medium-term sustainability; containment of recurrent expenditure to create space for public investment and social spending; better targeted social programs recommended.",
    "Financial sector measures: Welcome steps to maintain confidence in the banking system — establishment of a standing committee for crisis prevention and management, strengthened capacity for stress tests; foreign parent banks’ commitment to maintain exposures and enhance subsidiaries’ capital critical; need to bolster deposit insurance framework and improve bank resolution procedures.",
    "Communication: Given risks to the external environment and challenges implementing fiscal policies, clear communication of policy objectives and effective public engagement on reform benefits are of prime importance.",
    "Outlook: Authorities’ strong commitment to appropriate policies and measures needed to achieve program objectives bode well for a successful outcome.",
    "Growth and inflation (2003–08): Growth averaged 6 percent per year during 2003-08 while inflation remained low.",
    "Capital inflows and imbalances: Bank privatizations, financial sector reforms, and improved growth prospects attracted large capital inflows; capital inflows drove a domestic demand boom, worsening internal and external imbalances (sharp rise in bank credit, acceleration of core inflation, widening current account deficit).",
    "Crisis impact (late 2008 onward): Stock market indices slumped, international reserves began to decline, bank credit growth halted, financial soundness indicators deteriorated; construction activity faltered and layoffs rose; revenue weakened while expenditure (driven by increases in wages and social benefits) rose sharply.",
    "Fiscal outcome: General government deficit widened to 4 percent of GDP from a near-balance in 2007.",
    "Design: Program designed to safeguard the currency board and cushion effects of the deteriorating external environment while redressing fiscal imbalances and strengthening the financial sector.",
    "Medium-term aim: Help position the economy for a strong recovery when the global environment improves and set the stage for sustainable growth and EU convergence by providing a framework for structural supply-side reforms and safeguarding competitiveness.",
    "Real GDP (Percent change)",
    "CPI (period average) 1/",
    "Money and credit (end of period)",
    "General government budget (In percent of GDP)",
    "External public debt (In percent of GDP)",
    "NPV of external public debt (In percent of GDP)",
    "Total public debt (In percent of GDP)",
    "Balance of payments (In millions of euros)",
    "Exchange rate regime: Currency board since August 1997",
    "Exchange rate, July 8, 2009: 1KM = Euro 0.5113",
    "Real effective exchange rate (2000=100, increase=appreciation) 2/",
    "[Bosnia and Herzegovina and the IMF](http://www.imf.org/external/country/BIH/index.htm)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
  ],
  "alternates": {
    "markdown": "/en/news/articles/2015/09/14/01/49/pr09258/index.md",
    "json": "/en/news/articles/2015/09/14/01/49/pr09258/index.json",
    "bundleManifest": "/en/news/articles/2015/09/14/01/49/pr09258/bundle-manifest.json"
  },
  "generatedAtUtc": "2026-09-26T17:30:47.783Z"
}