April 23, 2020 / 11:01 AM / a month ago

Bosnia gets $361 mln IMF loan despite coronavirus spending plan row

SARAJEVO, April 23 (Reuters) - The International Monetary Fund transferred a $381 million loan to Bosnia on Thursday, the central bank said, even though the Balkan country’s government has yet to formally approve borrowing plans to help fight the coronavirus crisis.

Bosnia’s central cabinet said on Monday that Bosniak, or Bosnian Muslim, cabinet ministers had delayed approval of the plans over demands they meet local requirements on borrowing, debt and guarantees by the state.

On Tuesday, Finance Minister Vjekoslav Bevanda called the demands unacceptable and said they could indefinitely delay the disbursement of funds approved under the IMF’s Rapid Financing Instrument.

Bosnia’s two rival ethnically-based regions, the Serb Republic and the Bosniak-Croat Federation, are generally at odds on most economic issues.

Bosnian authorities had already agreed the Federation would receive 62% of the IMF funds, with the Serb Republic getting the remaining 38%. But each region should allocate 0.5% of its share to Bosnia’s neutral Brcko District.

The IMF loan is to support spending on health and social assistance. The lender said it expected Bosnian national output to decline 5% this year before rebounding by 3.5% in 2021.

There have been 1,431 confirmed coronavirus cases in Bosnia so far and 54 deaths. As in other countries, stay-at-home orders to halt the spread of the disease have hit businesses and jobs. (Reporting by Maja Zuvela; Editing by David Clarke)

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