Bosnian cabinet approves interim financing for Q2 due to lack of budget

Bosnia's central government on Tuesday approved 241 million Bosnian marka ($133 million) in temporary financing for the second quarter of 2020, unchanged from the previous quarter, due to the lack of a formal budget.

Central institutions have been kept afloat through temporary financing arrangements since 2019 owing to a delay of more than a year in the formation of the new central government. The government was finally formed in December and Prime Minister Zoran Tegeltija said on Tuesday that it had passed a draft 2020 budget - albeit without support from Serb ministers, who complained that the document had not been updated to include measures to combat the coronavirus outbreak.

Since the bill needs the approval of Bosnia's Serb co-president, from the same party as the dissenting ministers, it is far from certain to pass. Tegeltija conceded that its growth assumptions would be wrecked by the coronavirus outbreak.

"The budget, drafted by the Finance Ministry, was projected for normal conditions and forecast a national output growth of 3%, but now it is obvious that output will go into negative territory due to the impact of coronavirus," he told reporters. Some 807 million marka of the 996 million marka budget are earmarked for servicing Bosnia's foreign debt.

Bosnia is made up of two autonomous regions - the Serb Republic and the Federation, dominated by Bosniaks and Croats - which are linked by the central government, whose powers are relatively weak. ($1 = 1.8126 marka)