Bosnia needs to kick-start reforms in 2018 to unlock IMF funding - EBRD

Bosnia must focus in the short term on completing the long-delayed first review under its funding arrangement with the IMF by implementing the necessary prior actions, the EBRD said in its 2017-2018 transition report published on Wednesday.

In September last year, the IMF approved a three-year 553.3 million euro loan ($648.2 million) to Bosnia to support the country's economic reform agenda. However, the IMF delayed the release of the second loan tranche in May, after the Bosnian authorities failed to meet the agreed reform targets.

Bosnia's failure to comply with the IMF's conditions has also either put on hold or jeopardised some financing from the European Commission and from international financial institutions (IFIs), including the EBRD and EIB, theEBRD said.

Furthermore, the EBRD noted that Bosnia must also target and implement key investment climate improvements. The challenge, the lender noted, is to improve the dialogue between the authorities and the private sector on investment-related issues and to deliver results in areas such as procurement reform, enhancing tax administration, and improving business registration.

Bosnia should also focus on enhancing regional integration in the coming year, according to the report. 

"Bosnia and Herzegovina has belatedly agreed to join the Western Balkans Transport Community, but it will be vital to accelerate reforms in order to benefit from the international support for infrastructure projects that promote regional connectivity."

The EBRD predicts Bosnia's economic growth will slow to 2.5% in 2017, from 3.2% in 2016.