The RS to borrow another 200 million BAM by the End of the Year?

May 28, 2017 9:00 AM

nsrs7According to plans of the Ministry of Finance of the RS and their calendar of auctions for 2017, the RS will borrow another 198 million BAM by the end of the year. This debt will be conducted quarterly, through the issuance of securities, bonds and treasury bills.

Within the budget of the RS for 2017 was planned a total of 522 million BAM within the budgetary funds, of which the planned financing from domestic sources, on a net basis, amounts to 318 million BAM.

Only by the end of the second quarter of this year is planned a debt of 35 million BAM.

The economic analyst Zoran Pavlovic finds the increasingly high level of borrowing on a long-term basis, or bonds, quite worrying.

“The plan of borrowing on the basis of bonds of 25 million, in let’s say 10 years, means that the government is spending money for daily needs which, according to all economic laws, had to be focused on long-term investments rather than the short-term spending,” noted Pavlovic.

It is a very weak financial structure, it is what Agrokor has done as well, which is why it failed, stated Pavlovic. He noted that interest for the purchase of securities is decreasing when it comes to banks and insurance companies.

(Source: M. T./Klix.ba)

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