Revenues are growing due to inflation, citizens gain nothing: Entities spend money on debts and budget holes

(Patria) – Indirect tax revenues in Bosnia and Herzegovina continue to grow this year, but not thanks to economic activity or government reforms, but primarily due to inflation. In the first eight months of 2025, 7 billion and 886 million KM were collected, which is 383 million KM or 5.1 percent more than in the same period last year.

Although these are hundreds of millions of marks in unplanned surplus, citizens gain almost no benefit from these funds. The money, according to economists' assessments, is mainly used to plug budget holes and pay off debts.

According to the distribution of revenues, the Federation of BiH received 3.555 billion KM, Republika Srpska 1.989 billion KM, Brčko District 199 million KM, while 662 million KM was allocated for financing state institutions. Compared to last year, entity budgets received an additional almost 200 million KM in the Federation, 110 million in RS, and 11 million in Brčko, while state institutions received 17 million KM less.

Economic analyst Zoran Pavlović points out for BHRT that authorities perceive the revenue surplus as a "gift from heaven that needs to be spent as soon as possible", instead of systematically directing it towards development and covering future obligations. The president of the People's Front, Jelena Trivić, holds a similar view, warning that when revenues stabilize, the burden will once again fall on the citizens.

If the current trend continues, around 200 million KM more could enter entity budgets by the end of the year. However, as before, it is highly likely that this money will not bring tangible benefits to citizens.