SARAJEVO (Bosnia and Herzegovina), February 9 (SeeNews) – The International Monetary Fund said on Friday it will make available 74.6 million euro ($91.1 million) to Bosnia, after completing the first review of the country's economic performance under the Extended Fund Facility (EFF).
Following the review's approval by the fund's executive board, the total funds made available to Bosnia under the EFF total 149.3 million euro, the IMF said in a statement.
The executive board also concluded on Friday the 2017 Article IV consultation with Bosnia.
"Bosnia and Herzegovina has continued to make progress in lowering internal and external imbalances in recent years. The authorities have also implemented economic policies and structural reforms under the Fund-supported program, including maintaining fiscal discipline, safeguarding financial stability, and improving the business environment," Tao Zhang, deputy managing director and acting chair, is quoted as saying in the statement.
Zhang noted that it is important that the authorities continue with efforts to enhance growth potential and address structural weakness, while maintaining economic and financial stability.
"The recent increase in excise rates on fuel products is expected to unlock external financing for significant growth-enhancing infrastructure investment. Going forward, the authorities need to continue their efforts to improve the business environment, by reforming the labor market and reducing para-fiscal fees," Zhang said.
He explained that the budgets for 2018 envisage continued lowering of the wage bill in relation to GDP through a general wage freeze and hiring restraint, adding that the authorities must continue with public sector employment reforms.
Zhang also commended progress made in modernising the legal and regulatory environment of the financial sector by adopting new banking laws and amending the banking agency laws.
"Prompt passage of the new deposit insurance law will be important. Sustained efforts are needed to improve coordination, cooperation, and information exchange among various financial sector authorities to safeguard financial sector stability", he added.
The IMF executive board approved the 36-month, 553.3 million euro arrangement under the EFF for Bosnia and Herzegovina on September 7, 2016.
($=0.8191 euro)