Historical Maximum: Government Debt to Commercial Banks in BiH Exceeds Two Billion KM

Centres of Civic Initiatives (CCI) today presented a comprehensive report "State of the Nation" which provides a precise overview of the effects of reforms in BiH in the last 18 months, i.e. since the adoption of the Reform Agenda and its areas: Public Finance, Business Climate and Competitiveness, Labour Market, Social and Pension Policy, Public Administration and Rule of Law, and the impact of all the above on citizens' living standards.

- Due to political instability and blockades, the implementation of the Reform Agenda has been slowed down and selective, and in most areas, it is still not yielding expected results. Cumulatively, for all levels and all action plans, only 46 measures from the Reform Agenda have been implemented. Statistically speaking, BiH institutions, primarily the Council of Ministers, have the best implementation of their own Action Plan, but also the smallest number of measures. The Action Plan of the RS Government, considering the total number of measures in the plan and the number of adopted measures, has been implemented to the greatest extent, while the Action Plan at the FBiH level has been implemented to the least extent - the report stated.

- While over the past 18 months we have recorded several moderately positive indicators such as GDP growth, industrial production growth, tax revenue growth, or employment growth, most other important indicators are not positive. In the area of public finance, the public debt situation is worsening. Public debt in RS is critically high, and close to the EU limit of 60% of GDP, undermining the fiscal sustainability of the entity, as well as the entire country. Debt to commercial banks in BiH has reached a historical maximum of over two billion KM. Per capita debt is continuously increasing, and currently averages 3,370 KM, with debt in RS being higher by 80 or 1,932 KM compared to FBiH. The burden of debt servicing in entity budgets is enormous, with a growing trend instead of a decrease. The share of debt of 65% in the budget revenues of the Federation of BiH and 42% in RS for 2017 has practically trapped the budgets and minimized the chances for stabilizing public finances. Therefore, besides budgets not being development-oriented, they are no longer stabilizing or social. Budgets are debt-ridden - stated, among other things, CCI Program Manager Adis Arapović, writes Patria.