Minister of Finance of FBiH Jelka Milicevic said that our country will not get the second tranche from the IMF because part of recommendations of the Letter of Intent has not been met by the deadline.
Due to the failure to adopt amendments to the Law on Excises, BiH will not get another tranche of the IMF loan, so the necessary funds for the FBiH budget will have to be provided in another way, the Minister of Finance of FBiH Jelka Milicevic confirmed.
With Reform agenda and Letter of intent, FBiH Government committed to increase the excise tax on fuel, but changes to the law have not yet been adopted.
“The second tranche from the IMF within the credit arrangement between Bosnia and Herzegovina and the IMF will not be transferred at the end of this year, as planned in the FBiH budget for 2016, because part of recommendations of the Letter of Intent will not be met by the deadline” said Milicevic.
The Executive Board of the IMF will meet early next year to determine the completion of the first review of the arrangement provided that all prior actions and structural benchmarks are met.
Milicevic points out that still there is no danger of threat to the financial stability of the FBiH budget.
“We plan to replace the missing part of the funds in the amount of 212 million KM with a combination of measures related to the corresponding savings in the FBiH budget and the additional issue of treasury bills and bonds. Given the risk exposure of banks to the budget of the Federation of Bosnia and Herzegovina and their liquidity, it is evident that there is no risk to the financial stability of FBiH,” said Milicevic.
The IMF mission has recently held talks with representatives of entity governments and the Council of Ministers and realized that the BiH authorities have not fulfilled commitments of the Letter of Intent.