Bosnia’s central government has approved the fiscal framework for 2014-2016 setting the annual spending of state-level institutions at BAM 950mn (EUR 486mn), the government said in a statement following its regular weekly meeting on Oct 23. Revenue from indirect taxation is seen at BAM 750mn annually over the next three years, unchanged compared to 2013. No further details were available.

Bosnia's 2013 budget bill amounts to BAM 1.73bn, including BAM 950mn financing for the state institutions and BAM 788.5mn for servicing the country’s foreign debt. Apart from the BAM 750mn tax revenue, the total financing also includes BAM 140mn in non-tax income, BAM 7.2mn in donations and aid and the remaining BAM 52.8mn are to come from other financing and revenues*.

The country’s consolidated budget which includes state-level institutions and the two entities – the Federation and the Serb Republic - is expected to post a deficit equal to 2.0% of the full-year GDP firecast, down from 2.6% of GDP the year before, according to the IMF. Nonetheless, in January-June 2013, the consolidated budget recorded a surplus of BAM 109.6mn, according to central bank data. However, the latter exclude capital investments in the field of infrastructure and municipalities budgets and are likely underestimating the overall level of expenditures.

* including BAM 23.4mn of foreign borrowing and BAM 9.8mn of macro-financial support from the EU.