VIDOVIĆ: HIGHER BORROWING FOR MORE INVESTMENT

BANJA LUKA, JUNE 11 /SRNA/ – The Republika Srpska Government today adopted a proposed Decision amending the Decision on the amount of guarantees Srpska may issue this year, increasing the limit to BAM 1.4 billion with the aim of boosting investment, Finance Minister Zora Vidović stated.

"The upper limit being set at BAM 1.4 billion, instead of BAM 900 million, will be proposed to the National Assembly as provided under the law adopted in December last year. By the end of the year, several major projects are expected to be launched that will require state guarantees," Vidović explained.

She stated that Republika Srpska has opted for a very high level of investment, emphasizing that this had not been possible over the past several years.

"At this moment, Srpska has BAM 6.6 billion worth of investments under implementation," Vidović recalled.

She explained that the decision to pursue a high level of investment was made with the goal of increasing gross domestic product /GDP/, which is expected to achieve four percent growth over the next three years.

According to her, the Decision on the long-term borrowing of Republika Srpska for 2026 is also being amended, which would allow the entity to borrow an additional BAM 804 million compared with the plan adopted in December.

"This year, we initially projected BAM 1.6909 billion; we are now proposing BAM 2.495 billion. Of these additional BAM 804 million, BAM 680 million will go toward investments, while the rest will be used for debt servicing and settling obligations," Vidović specified.

She assessed that, despite increased borrowing, which is unavoidable for investment purposes, Srpska will end the year with public debt at 38.83 percent of GDP, which is well below the limit of 55 percent.

"Total debt will amount to 42.66 percent of GDP, while the limit is 60 percent. We project GDP at BAM 20.30 billion, but given inflation, I believe it will be considerably higher," Vidović concluded.