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Bosnia government approves 2015 budget

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The budget was passed seven months after a general election in October, as the central and regional governments in Bosnia's complex power system took months to be formed.

World Bulletin / News Desk

Bosnia's central government, which connects the Balkan country's two autonomous regions, approved a leaner 2015 budget on Monday, a month ahead of talks with the International Monetary Fund on a new loan deal.

The budget was passed seven months after a general election in October, as the central and regional governments in Bosnia's complex power system took months to be formed, forcing the country to operate on interim budgets in the first two quarters.
The IMF in January withheld the disbursement of funds under its standby loan for Bosnia, which was frozen last September over the government failure to implement agreed economic policies, after the central government and the Bosniak-Croat Federation failed to pass their respective 2015 budgets.
The Serb Republic approved its budget in December.

Earlier this month, the IMF wrapped up a review of its 33-month aid programme for Bosnia worth around 700 million euros ($798.84 million), most of which has been disbursed. The programme is expires in June and is expected to be replaced with a new loan deal.

The national parliament approved a balanced budget of 1.56 billion Bosnian marka ($904 million), 13 percent lower than in 2014, with 950 million marka allocated to finance central institutions and the rest for covering foreign debt.

The national budget, which is financed mainly from indirect taxes and by the two regions, does not foresee a deficit and thus needs no financial injection from the IMF.

But the Bosniak-Croat Federation and the Serb Republic urgently need the IMF cash to cover their widening budget deficits, which they are meanwhile trying to plug by tapping the local markets.

The lender has said it would hold in-depth talks on a possible new loan in Bosnia in June, but warned that the government would have to prepare a "strong reform package".

SOURCE: Worldbulletin, 18/05/2015, http://www.worldbulletin.net/todays-news/159338/bosnia-government-approv...