The International Monetary Fund on April 21 said it has approved €333mn in emergency assistance to Bosnia & Herzegovina under the Rapid Financing Instrument (RFI) to help the country tackle the consequences from the coronavirus (COVID-19) outbreak.

The aid should support Bosnia’s increased spending aiming to contain the economic impact of the coronavirus.

Bosnia has been in a state of disaster since mid-March and its central government has asked the IMF to increase the aid to 100% of its quota, but the country came close to losing its chance to get the funding as its politicians failed to agree on its distribution.

On the day the IMF announced it has approved the sum, the Bosnian authorities once again threatened the agreement. It was not approved unanimously by the state-level government as some parts of the text of the agreement did not match the text of the letter of intent, which, according to some ministers, is not legal. Although the issue seems rather technical, it will jeopardise the deal if the authorities do not act quickly.

“The near-term economic impact in BiH is expected to be substantial, generating a rapid deterioration of external accounts and urgent balance of payment needs. Economic growth is expected to decline by 5% in 2020 and recover to around 3.5% in 2021,” the IMF said in the statement.

“This IMF financing will play a vital role in catalysing emergency assistance from the international community, in particular the EU’s,” the statement also noted.

Financial aid under the RFI is provided in the form of outright purchases and secures help to IMF’s member states who need urgently fresh cash without the need for a full-fledged economic program or reviews.