The World Bank said its board of directors approved a 74.50 million euro loan to Bosnia for the public finances development policy operation. The program will provide budget support to underpin policy efforts by Bosnian authorities to improve transparency of public finances and lower fiscal pressures over the medium-term, the bank said in a statement.
Bosnia has one of the world’s largest public sectors relative to the size of its economy, with general government expenditures nearly 44% of GDP in 2016, and public enterprises adding even more to the public footprint in the economy. The public finances development policy operation supports measures to reduce public spending by as much as 2.3% of GDP in the medium term and lays the groundwork for further structural reforms for a more effective public sector. It is anchored in the Reform Agenda, a comprehensive structural transformation agenda that is supported by all Bosnian governments and by all development partners, including the European Commission, the International Monetary Fund, and the World Bank Group.
“The approved programme recognises the efforts of BiH authorities to make public spending more sustainable in the medium-term,” said Ellen Goldstein, World Bank director for the Western Balkans.
“Tackling the legacy of an unwieldy and ineffective public sector is one of the most important aspects of the country’s Reform Agenda, which is designed to transform the economy in line with European Union criteria and to accelerate growth and job creation.”