FBiH Government Adopts Draft Budget for 2026 in the Amount of 8.9 Billion KM

(Patria) - The Government of the Federation of Bosnia and Herzegovina, at its session in Sarajevo today, adopted the Draft Budget of the Federation of BiH for 2026 in the total amount of 8,898,279,146 KM, which will be sent for parliamentary procedure for adoption under an urgent procedure. The budget of the Federation of BiH for the next year is higher by 690 million KM compared to this year's.

It was explained that the main goal of the Budget of the Federation of BiH for 2026 is sustainable public finance management, with responsible expenditure control and ensuring stable sources of financing. The budget is aimed at fulfilling obligations towards citizens and institutions, with a special focus on social protection, healthcare and pension systems, a stable business environment, and maintaining the functionality of public services.

The Budget of the Federation of BiH for 2026 represents a consolidated financial framework that includes all planned revenues and receipts, as well as expenditures and outlays of the Federation of BiH for the specified budget year.

Planned current transfers to other levels of government and funds in the Budget of the Federation of BiH for 2026 are aimed at ensuring the continuity of key social, health, and development policies, as well as strengthening the fiscal stability of lower levels of government. These funds support the implementation of legal obligations, the improvement of the social protection system, the strengthening of health insurance, and the realization of employment measures and balanced regional development.

In this context, funds in the amount of 59,000,000 KM are planned for the implementation of the Law on Foster Parents in the Federation of BiH, ensuring stable financing of the rights of parents caring for children with developmental disabilities and strengthening the social protection system. Also, funds in the amount of 31,500,000 KM are foreseen for transfers to civilian war victims, with the aim of continuing institutional support for this particularly vulnerable category of the population and improving the realization of legally guaranteed rights.

Funds in the amount of 80,000,000 KM are planned for the Health Insurance and Reinsurance Institute of the Federation of BiH, contributing to the sustainability of the health insurance system, the regular fulfillment of obligations to the Solidarity Fund, the reduction of waiting lists, and the improvement of access to healthcare services for citizens.

Funds in the amount of 12,288,480 KM are planned for the realization of employment projects, aimed at active labor market measures, stimulating employment, and strengthening the competitiveness of the workforce, thereby contributing to overall economic growth and social inclusion.

Significant funds are planned in the Budget for current transfers to individuals, with the aim of ensuring the continuity of social benefits and the implementation of key legal solutions. The largest portion of these funds relates to pension payments under various legal bases, for which an amount of 4,302,716,055 KM is planned, ensuring regular and stable pension payments, preserving the living standard of pensioners, and the long-term sustainability of the pension system.

Pensions are expected to increase by more than 17 percent during 2026 compared to 2025. Changes in the pension adjustment method will increase the expenditure side of the budget by an additional 280 to 340 million KM in 2026. Furthermore, the change in the pension adjustment method directly alters the method of adjusting veteran benefits (war disability pensions, war decorations, subsistence allowance), as well as benefits for non-war disabled individuals, increasing allocations for these categories by an additional more than 80 million KM.

Funds in the amount of 333,000,000 KM are planned for current transfers for disability benefits, while funds in the amount of 336,000,000 KM are foreseen for transfers for persons with disabilities – non-war disabled. These allocations ensure continuous financial support for persons with disabilities, improve their social security, and contribute to their greater inclusion in the community.

An amount of 80,000,000 KM is planned for the implementation of the Law on the Rights of Demobilized Veterans and their Families, ensuring the continuation of the realization of legally guaranteed rights, improving the social status of this category, and confirming institutional care for the veteran population.

Within the framework of implementing the Law on Support for Families with Children in the Federation of BiH, funds in the amount of 228,000,000 KM are planned in the 2026 Budget, aimed at strengthening pro-natalist policies, reducing the risk of poverty for families with children, and ensuring equal access to social rights throughout the Federation of BiH.

Additionally, funds in the amount of 16,000,000 KM are planned for one-time financial assistance for newborns, providing direct financial support to families in the earliest stages of parenthood.

Within the framework of implementing the Law on Protection from Domestic Violence, funds in the amount of 1,100,000 KM are planned, intended to strengthen preventive and protective measures, as well as support the work of specialized organizations providing assistance to victims of violence.

Subsidies to public enterprises are planned, aimed at strengthening their operational stability and improving public interest services. Funds in the amount of 3,000,000 KM are planned for the implementation of a just transition and mitigating market disruptions, providing support to public enterprises in adapting to changes in the energy and industrial sectors, while preserving jobs and the social security of employees.

A significant portion of the funds relates to the transfer to Railways of the Federation of BiH in the amount of 24,000,000 KM, ensuring the continuity of rail transport, infrastructure maintenance, and improving safety and quality of services in this strategically important transport sector.

Additionally, funds in the amount of 10,000,000 KM are planned for settling obligations under the Law on Financial Consolidation of JP Railways of FBiH. An amount of 10,000,000 KM is planned for the improvement of air traffic, with the aim of strengthening the connectivity of FBiH with international destinations, supporting development, and stimulating tourism and economic activities.

Within the total subsidies for private enterprises and entrepreneurs, an amount of 23,227,134 KM is planned, ensuring the implementation of various economic policy measures aimed at stabilizing business operations and strengthening economic resilience.

The most significant individual amount relates to agricultural incentives, for which allocations have been increased by 7,000,000 KM, amounting to 190,000,000 KM, ensuring the continuity of support for primary agricultural production, rural development, and food security.

A significant portion of the funds relates to current transfers to cantons, for which an amount of 200,000,000 KM is planned in the Budget, aimed at strengthening the fiscal stability of cantonal budgets, ensuring balanced regional development, and supporting the financing of their responsibilities.

Capital transfers to cities and municipalities are planned at 48,000,000 KM, enabling local communities to implement priority infrastructure projects.

99,000,000 KM is foreseen for road infrastructure, allowing for the continuation of modernization and expansion of roads, increasing safety and better connectivity between cities and municipalities. The transfer for the construction of highways, expressways, main roads, and other roads in the amount of 150,000,000 KM represents a strategic step forward in the development of the Federation's transport network, ensuring faster and safer traffic.

The Government of the Federation of BiH today also adopted the Draft Law on the Execution of the Budget of the Federation of BiH for 2026, as well as the Draft Law on Amendments to the Law on Budgets of the Federation of BiH, which will be sent for further parliamentary procedure under an urgent procedure.