News Brief: IMF Approves US$16 Million Tranche to Bosnia and Herzegovina Under Stand-By Credit
IMF News, December 20, 2002
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Bibliographic details
- Authors: Credit News Brief Related Links Bosnia, Herzegovina
- Published: December 20, 2002
IMF decision and disbursement
- The Executive Board completed the first review of Bosnia and Herzegovina's economic performance under the Stand-By Arrangement for the period August 2002-November 2003.
- The decision enables Bosnia and Herzegovina to draw SDR 12 million (about US$16 million) from the IMF immediately.
Stand-By Arrangement details and past drawings
- The Stand-By Arrangement was approved on August 2, 2002 and totals SDR 67.6 million (about US$91 million).
- So far, Bosnia and Herzegovina has drawn SDR 19.6 million (about US$26 million).
Executive Board assessment and recommendations (Shigemitsu Sugisaki, Deputy Managing Director and Acting Chair)
- Progress and program implementation
- "Bosnia and Herzegovina has made significant economic progress during the current Stand-By Arrangement."
- "Overall program implementation remains fundamentally on track, as most macroeconomic performance criteria and structural benchmarks have been observed to date."
- Governance and reporting
- There was "a case of misreporting of Entity transfers to the State that required, and obtained, a waiver from the Fund's Executive Board."
- It was emphasized that "It will be critical that such incidents not be repeated."
- Fiscal policy and budgets
- "The welcome acceleration in the pace of fiscal adjustment in 2002 reflected prudent expenditure management alongside key reforms to tax administration."
- "Interim budgets for 2003 incorporating further fiscal discipline have been approved pending the formation of the new administrations."
- "Any revisions to these budgets by the new administrations should avoid increasing the consolidated deficit and spending targets."
- Monetary and banking sector developments
- "The currency board arrangement continues to deliver a strong and stable currency and low inflation and enjoys the confidence of markets, as reflected in the high level of international reserves."
- "The banking system has been strengthened through privatization and the increasing application of international standards of banking regulations."
- Growth, employment, and external support
- "In the context of prospective declines in reconstruction aid inflows and high unemployment, actions to increase exports will be essential."
- Recommended elements of strategy: fiscal prudence; efforts to accelerate privatization; improve the business environment; strengthen bankruptcy procedures.
- Poverty reduction strategy
- "The poverty reduction strategy paper now under preparation should aim to tackle poverty on the basis of strong macroeconomic policies, and efforts are encouraged to secure as wide an ownership base for this as possible."
Key statistics (exact figures from the brief)
- Review period: August 2002-November 2003
- Immediate drawing enabled: SDR 12 million (about US$16 million)
- Stand-By Arrangement total: SDR 67.6 million (about US$91 million)
- Drawn to date: SDR 19.6 million (about US$26 million)
Source: IMF News Brief, December 20, 2002.