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The recent amendments to the Law on Frozen Foreign Currency Accounts (FFCA) have brought significant changes. The payout period has been reduced from 13 years to 5 years, with accrued interest rates being raised from 1/2% to a range between 5% to 13%. These modifications have notable effects, increasing the total cost to approximately KM 4.2 billion. This is a substantial rise, representing a 78% increase in the amount to be paid and equivalent to 26% of the GDP. Put differently, this increase of KM 1.8 billion accounts for 3 years of wages for all teachers in BiH or a full year's pension for all BiH pensioners. The amendments aim to improve fiscal sustainability and provide a boost to the economy.
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Frozen Foreign Currency Account Fiscal Sustainability
Amendments to the Law on FFCA • Payout period being shortened from 13 years to 5 years; and • Increase accrued interest from 1/2 % to between 5% - 13%.
Effects of the Amendments • Raises the total cost to approximately KM 4.2 billion. • Increase by KM 1.8 billion or 78% in the amount to be paid. • Represents 26% of GDP.
Put another way: • 1.8 billion KM= 3years of wages of all teachers in BiH or • Full year pension for BiH pensioners.
