IMF mission to visit Bosnia on Sept 10 for eight review of EUR 632mn stand-by deal

By bne IntelliNews September 5, 2014

An IMF mission will arrive in Bosnia on Sept 10 for the eight review of the country's augmented EUR 632mn stand-by loan deal, the IMF's resident representative in Sarajevo, Ruben Atoyan, said as quoted by daily Dnevni Avaz.

The mission, led by Ron van Rooden, will stay in Bosnia until Sept 19, Atoyan told reporters in Sarajevo on Sept 5.

Bosnia and the IMF signed a 24-month EUR 390mn stand-by agreement in September 2012 but the deal was extended by nine months and augmented by EUR 153.1mn in January 2014 to meet additional financing needs expected to arise mainly in late 2014.

Yet, in June 2014 the IMF augmented the deal again by further EUR 95.7mn to help the country cope with the damages of the mid-May floods. After the two augmentations the size of the deal reaches EUR 631.6mn, or 330% of Bosnia's IMF quota.

Also in June, the Fund's executive board approved the completion of the sixth and seventh reviews of Bosnia's economic performance under the stand-by programme, disbursing an instalment of EUR 191.4mn, which included the EUR 95.7mn augmentation. The last tranche brought the total disbursements under the arrangement to EUR 478.5mn.

The IMF board also approved back in June Bosnia’s request for modification of the end-June 2014, end-September 2014, and end-December 2014 performance criteria on the fiscal balances (net lending) of the governments of the two entities - the Federation and the Serb Republic, to reflect the impact of the floods on the government finances.

Since then the governments of the two entities and the state-level government revised their budgets for 2014 to adjust them to the new circumstances.

Later on in July, the IMF downgraded dramatically its forecast for Bosnia's 2014 economic growth to 0.7% from 2.0% as a result of the floods and the damage they caused to the economy, seen by the Fund at 5-10% of GDP.

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