Secret information from the FBiH Government session: Federation's deficit amounts to 1.06 billion marks, followed by borrowing of 2.3 billion

The current deficit in the Budget of the Federation of BiH amounts to 1.065 billion marks. This was announced by officials from the FBiH Ministry of Finance at the last session of the FBiH Government. However, the transcript from the FBiH Government session has been declared a secret document.

“We have a current deficit in the amount of one billion and 65 million marks,” said a representative of the FBiH Ministry of Finance, addressing the ministers and Prime Minister Nermin Nikšić.

For the Federation to survive at all, the FBiH Government plans new borrowing in the amount of 2.3 billion next year. According to Istraga's information, it was announced at the session itself that the Federation should borrow about 1.5 billion marks on the London Stock Exchange by issuing bonds. The remaining borrowing will be on the domestic market.

As announced at the FBiH Government session itself, borrowing on the London Stock Exchange will be less favorable for the Federation compared to last year, as the credit rating of the Federation of BiH will certainly fall.

We remind you that in July this year, the FBiH Government announced that it had “successfully borrowed on the London Stock Exchange”.

“On July 10, the Federation of BiH successfully placed its first issue of Eurobonds, in the amount of 350 million euros, with a fixed coupon of 5.50%, in Reg S/144A format with strong support from American and European investors. The transaction was realized on the London Stock Exchange and marks the Federation of BiH's first international borrowing under market conditions. Investors showed strong interest. The order book exceeded EUR 1.8 billion, which is 5.2 times the amount issued, making this transaction the most oversubscribed EUR bond from developing countries in 2025. Thanks to the two-phase issuance strategy, the Federation of BiH managed to lower the initial indicative price by 50 basis points, which is one of the largest price corrections this year.

The order book recorded over 70 institutional accounts from more than 20 countries, including JP Morgan, Eaton Vance, Nomura, Mesarete Capital, Vanguard, Payden & Rygel, UBS Wealth Management, and a number of other European and regional funds and banks. This confirms good diversification and a high-quality investor structure. The Federal Ministry of Finance announced that this issue represents a key milestone in the international fiscal integration of the Federation of BiH. The auction result shows the credibility of the Federation of BiH in the international financial market and opens up space for future investment opportunities and economic growth. The presence of renowned investors and the stable start of trading send a clear message of confidence in the financial responsibility and capacity of the Federation of BiH,” the FBiH Government announced.

That the FBiH considered borrowing on foreign stock exchanges and was preparing bond issues was also confirmed through the borrowing strategy for 2025, which stated that the first issue of Eurobonds on the international financial market in the amount of 300 to 350 million euros is planned for the second half of this year. In addition, the Federation amended the Law on Debt, Borrowing, and Guarantees. These amendments enabled Nermin Nikšić's government to borrow on foreign markets without parliamentary consent.

Due to extravagance in the Budget, the Federation cannot borrow from the IMF. Therefore, borrowing on the stock market under significantly less favorable conditions is planned.