Milićević: According to current projections of revenue decline, we are still optimistic

SARAJEVO, (Patria) – Jelka Milićević, Minister of Finance of the FBiH, explained the economic measures of the FBiH Government, and as the commander of the Federal Civil Protection Headquarters, she stated that all issued orders have been extended until April 30, 2020.

She stated that the health of the citizens is certainly a priority for the Government, but the functioning of the system of institutions and the economy in the Federation is equally important.

“The budget rebalance is focused on the health and economic crisis. Ideally, revenues should match expenditures. At this moment, we are experiencing a decline in revenues, and on the other hand, we are responding to disruptions in all segments of our society. We have tried to find solutions and monitor macroeconomic parameters. Our projections indicate a decline in private consumption, resulting from job losses, salary reductions, and reduced inflows from abroad. The only thing keeping the system alive right now is public spending.”

At this moment, the projected decline in tax revenues is approximately 15 percent, and we are still optimistic.

“The global economy has suddenly frozen, and consequently, so has the FBiH. We expect the decrease to remain around 17 percent by the end of the year. There will also be a smaller inflow from VAT, which we have calculated to be 158 million KM. Based on the number of employed people, those who have lost their jobs, and those who have lost temporary employment, contributions to the pension fund have decreased by 315 million KM. Pensions must not be jeopardized, the minimum standard of living must not be jeopardized, a minimum wage must be ensured, and we propose a subsidy for the minimum wage or contributions for a large number of companies,” explained Milićević.

She stated that the result of all these activities is a deficit of 780 million KM.

“This is only possible in a state of natural disaster. We must find all reserves, surpluses from previous years, own funds, but we still have to borrow around 790 million KM. We had a debt of 585 million KM, and now we are planning for 1.3 billion KM. We are not borrowing for anything other than to mitigate the consequences of the disaster in the health and economic sectors.

She called on cantons and municipalities to rebalance their budgets as soon as possible.

When asked about the position of HDZ BiH on the budget rebalance and whether they would submit amendments, the minister said that the Ministry of Finance had a difficult and complex task in preparing a proposal that would follow the proposed Law on Mitigating Economic Consequences.

"I expect the proposed solutions to be supported because this is a state of natural disaster. We also expect that if there are any proposals, they will be sustainable proposals that will not undermine the system," said Milićević, adding that the rebalance and the so-called corona law would be addressed at the same session.