SARAJEVO (Bosnia and Herzegovina), September 10 (SeeNews) – Bosnia has started talks with the World Bank on a $100 million (69 million euro) credit agreement to support its budget spending, the government of the country's Muslim-Croat Federation said on Thursday.
A World Bank mission has arrived in Bosnia to arrange the credit facility for the support of public spending restructuring, as 70% of the loan will be interest-free funds from the bank's soft-loan wing IDA, the Federation cabinet said in a statement.
The Muslim-Croat Federation is one of the two autonomous parts of post-war Bosnia, the other is the Serb Republic.T he two parts have separate budgets. Bosnia also has a central government and institutions which have their own budgets.
“The World Bank help for the restructuring of public spending in our country is an answer to the global economic crisis and should contribute to budget stabilisation and economic recovery,” the statement said, adding the help from the Wrld Bank is connected to Bosnia’s funding agreement with the International Monetary Fund (IMF).
In July, the IMF approved a $1.52 billion stand-by arrangement for Bosnia. The 36-month loan is designed to help the Bosnian authorities mitigate the adverse effects of global financial crisis.Two-thirds of the IMF credit will go to the Federation and one-third - to the Serb Republic.
In March the Federation revised its 2009 balanced budget, increasing it to 1.9 billion marka ($1.4 billion/971 million euro) from 1.6 billion marka.
The Serb Republic cut its 2009 balanced budget by 4.2% to 1.6 billion marka in July to meet the conditions of the deal with the IMF.
(1 euro=1.95583 marka)