Standard & Poor's Affirmed the Credit Rating of Bosnia and Herzegovina

International rating agency Standard and Poor's affirmed the credit rating to Bosnia and Herzegovina, being B with Stable Outlook.

In the overview, the analysts of this agency state that they anticipate that Bosnia and Herzegovina will continue to benefit from international financial support, which in turn will support government finances and will stave off the pressures on the country' balance. First of all, it is related to the new program with the International Monetary Fund (IMF), which, according to anticipations, should be concluded in the next few months. This program would provide additional EU and World Bank funding.

The stable outlook is based on expectations of likely continuation of the international creditors support with the associated loan conditionality providing the policy anchor for the Reform Agenda.

Coupled with the IMF negotiations, the governments of both Entities have adopted legislation to fulfill prior actions within Reform Agenda, adopted last year, including labour laws, reform of corporate income tax and laws to improve the banking supervision. However, even with the expected IMF arrangements, analysts of the agency expect risks in the implementation. Progress in structural reforms is a main condition for improving business environment and for fueling economic growth. As in the past, disbursements from a fresh IMF arrangement would be the key in the financing of the current account deficit of Bosnia and Herzegovina for 2016.

In their report, analysts of the Standard and Poor's stated that Bosnia and Herzegovina is committed to maintaining the independence of the Central Bank of Bosnia and Herzegovina and the Currency Board, which entails adequate coverage of the monetary base by the foreign currency reserves.