FBiH PM discusses economic outlook and Reform Agenda with visiting IMF mission head

The IMF Resident Representative in BiH, Andreas Tudyka, was also present at the discussions. The main topics addressed economic and fiscal trends, structural reforms, fiscal policy priorities, and the country’s progress on its European path.

Regarding economic trends, the FBiH Government underscored that its foremost priority is the swifter implementation of public investments, particularly in road infrastructure. It was noted that engaging domestic production factors in this sector provides the highest multiplier effect on economic growth.

In the realm of revenue collection, the Federation of BiH continues to log positive trends, especially concerning contributions and indirect tax revenues. Simultaneously, this revenue growth is enabling measures that are expected to positively influence consumption and, consequently, boost economic growth.

“Revenue growth, coupled with the FBiH Government’s responsible fiscal policy, has enabled us to meet our obligations on time while also securing investments that drive economic growth,” remarked Prime Minister Niksic.

In this context, alongside investments in road infrastructure, Prime Minister Niksic highlighted planned investments in rail and energy infrastructure, with a particular focus on renewable energy and the Southern Gas Interconnection. He anticipated that with planned investments, stimulus measures, and economic recovery among the country’s major trading partners, economic growth of around three percent can be expected next year.

The IMF officials were also informed of the measures undertaken by the FBiH Government this year to improve workers' living standards and provide relief to employers and the wider economy. These include raising the minimum wage, providing subsidies to employers and businesses to safeguard jobs, and permitting tax-free support payments to employees. Furthermore, contribution rates in the Federation of BiH were cut by 13.25 percent from mid-year.

During the meeting, information on fiscal trends and projections for the coming year was exchanged. Prime Minister Niksic stressed that the FBiH Government remains focused on implementing ongoing fiscal reforms, revenue collection, expenditure control, and transaction fiscalisation.

It was also pointed out that resolving disagreements over state property could further accelerate economic growth, given the expressed interest and volume of investments currently on hold pending agreement on this issue.

Both parties welcomed the European Commission’s endorsement of the Growth Plan for BiH, and Prime Minister Nikšić reiterated the FBiH Government’s full commitment to meeting its reform obligations and pushing forward the country's European journey.

The FBiH Prime Minister conveyed his appreciation for the successful cooperation and technical assistance provided by the IMF, while the Head of the IMF Mission responded that the institution values the robust collaboration, supports the FBiH Government, and is committed to Bosnia and Herzegovina's success and progress.

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