The International Monetary Fund warned Bosnia that it must meet the terms of its loan arrangement with the lender to get the program back on track and boost economic growth and job creation, reported Reuters. The IMF halted the 550 million euro stand-by loan program in February after Bosnian authorities failed to carry out economic reforms agreed in November last year.
The program is part of a wider reform package devised by the European Union to guide the country towards faster integration with the bloc. Bosnia’s two entities have made some progress on structural reforms but implementation of some of the key measures “has been much slower than expected”, the IMF said in a statement.
Republika Srpska and the Federation entities must adopt 2018 budgets, while the national parliament has to pass a law raising taxes on fuel and another law on deposit insurance.
The IMF also said the RS and the Federation must take steps to ensure due diligence is carried out on the entities’ two government-controlled telecoms.
The IMF distributes the loan payments to the national government in Sarajevo, but the two entities are the principal beneficiaries of the aid. They have factored the aid into their respective budgets, but as the IMF cash has been frozen, both entities have had to resort to issuing domestic debt to cover the budget gap and finance maturing debt.