SARAJEVO (Bosnia and Herzegovina), November 20 (SeeNews) – Bosnia must contain public spending in line with the projected level if it is to receive a second tranche under its stand-by funding deal with the International Monetary Fund (IMF), local media reported on Frday.
Bosnia should also implement reforms in its social and pension systems by the end of the year if the installment of 95 million euro ($141 million) is to get approval at the IMF board meeting in the middle of January, news portal Capital (www.capital.ba) quoted the head of the IMF mission to Bosnia, Costas Christou, as telling a news conference.
The IMF approved in July a 36-month 1.2 billion euro loan deal designed to help Bosnia mitigate the effects of the global financial crisis. The approval made about $282.37 million available immediately while the remainder was to be disbursed in installments subject to quarterly reviews.
It is now up to the Bosnian authorities to meet the conditions for receiving the second tranche, Capital.ba quoted Christou as saying at the end of the IMF quarterly review visit to Bosnia.
He added the upkeep of Bosnia's administration and public welfare systems is really high and the authorities have pledged to cut administrative expenses next year.
Bosnian Prime Minister Nikola Spiric told the same news conference that Bosnia's financial system has remained stable thanks to the first tranche from the IMF programme, Capital.ba said.
He also said the government has reviewed its forecasts and now sees the 2009 consolidated fiscal deficit at 5.25% of the projected gross domestic product (GDP), up from 4.6% projected earlier. The deficit for 2010 has also been revised upwards to 4.5% of GDP from the initial 4.0%.
Bosnia is made up of two autonomous parts - the Muslim-Croat federation and the Serb Republic, linked via a weak central government. The two regions also have their separate governments and budgets.