FBiH Government Secures Pension Payments Despite Contribution Drop Due to Floods!

The Government of the Federation of BiH, at today's session in Mostar, determined the method of distributing an additional 92 million marks, which were approved by the International Monetary Fund due to catastrophic floods, and in that regard, determined the budget rebalance, reports the BiH news agency Patria (NAP).

- The additional amount of 92 million KM, paid by the International Monetary Fund as assistance to mitigate the consequences of the natural disaster and cover the reduction in revenue in the FBiH Budget, has been allocated as follows: 27 million KM used to cover the reduced amount of indirect tax revenue, 25 million KM planned for the verification of debt towards the Federal Pension and Disability Insurance Institute (PIO/MIO), and 40 million KM as credit funds for cantons – it was announced today by the FBiH Government.

The Federal Government, at today's 126th session held in Mostar, determined the Proposal for Amendments and Supplements to the FBiH Budget for 2014 and sent it to the parliamentary procedure under urgent procedure. The rebalanced Budget for 2014 amounts to 2,475,579,841 KM, which represents an increase of 106.2 million KM or 4.5 percent compared to the previous Amendments and Supplements to the FBiH Budget for 2014.

- There are several reasons why the FBiH Government decided to once again proceed with Amendments and Supplements to the Budget for this year. One of them is that the allocation of funds from the IMF resulted in an unplanned surplus of receipts, so it was necessary to replace a portion of domestic borrowing planned in the previous rebalance with these funds. Also, it was necessary to plan additional financial resources to preempt the negative consequences of the natural disaster – it was stated.

The rebalance of the Budget of Bosnia and Herzegovina did not involve any significant increases in expenditures within individual budget users, except for 25 million KM for transfers to PIO/MIO and 40 million KM in credit funds for cantons, apart from the restructuring of funds within the approved framework for that budget user.

- The increase in transfers for PIO/MIO by 25 million KM is the result of the assessment that the damage caused by floods and landslides will have negative consequences on the revenues of extrabudgetary funds, as the work of a large number of employees has been terminated due to destroyed economic and production capacities, thus reducing the inflow of funds from contributions. In accordance with this, the Federal Government decided to plan additional funds for these purposes, which will accelerate the debt repayment dynamics and serve as assistance due to the reduced inflow from contributions, so that pension payments can proceed without interruption – it was stated.

As the consequences of floods and landslides will also negatively affect lower levels of government in the Federation, financial resources in the amount of 40 million KM have been planned, which will be realized on a credit basis and under the same conditions under which the Federation of Bosnia and Herzegovina borrowed from the International Monetary Fund.

- This amount of funds will contribute to the stabilization and liquidity of the budgets of individual cantons. The criteria for allocating funds, as well as the amounts of credit funds per canton, will be defined later by the FBiH Government through a decision – it was announced, as reported by NAP.