The Federation of Bosnia and Herzegovina’s rising public debt is drawing attention to the entity’s fiscal outlook, with total debt reaching approximately 8.76 billion convertible marks (BAM) by the end of June 2026. That represents an increase of around 1.57 billion BAM in just six months and nearly 44% compared with the end of 2023. The sharp rise has been driven primarily by external borrowing, while the government’s repayment schedule points to substantially larger obligations later in the decade.
The figures show that the Federation’s debt has grown steadily since 2023, although the pace of the increase has accelerated in recent months. At the end of 2023, total debt stood at approximately 6.09 billion BAM. It rose to 6.46 billion by the end of 2024 and reached 7.19 billion at the close of 2025. By June 2026, the total had climbed to 8.76 billion BAM, highlighting a particularly significant increase during the first half of this year.
External debt accounts for most of the latest growth. Between the end of March and the end of June 2026, external obligations increased from approximately 5.45 billion to nearly 6.95 billion BAM. This represents a rise of around 1.5 billion BAM in only three months. Internal debt, by comparison, grew more modestly, moving from about 1.79 billion to 1.81 billion BAM over the same period.
By the end of June, external borrowing made up close to 80% of the Federation’s total debt. This composition matters because external obligations can expose public finances to factors beyond the entity’s direct control, including currency conditions, international interest rates and changes in global financing markets. The precise risks depend on the terms, currencies and repayment conditions of individual loans, but the large share of external debt makes those details particularly important when assessing future budget pressures.
Federation of BiH Debt and the Rising Repayment Burden
The debt increase also comes with a demanding repayment schedule. Current projections from the Federal Ministry of Finance indicate that the Federation is expected to meet debt obligations of approximately 458 million BAM in 2026 and around 659 million BAM in 2027. Payments are projected to reach about 630 million BAM in 2028, before rising to roughly 802 million BAM in 2029.
The pressure is expected to become considerably heavier toward the end of the decade. Repayments are projected to exceed one billion BAM in 2030, reaching approximately 1.27 billion BAM. The largest annual obligation in the current schedule is expected in 2031, when the Federation may need to service around 2.06 billion BAM in debt. Of that amount, approximately 1.92 billion BAM is linked to external debt.
These projections make the timing of borrowing and repayment an important part of the Federation’s fiscal planning. Large debt service payments can limit the room available in annual budgets for infrastructure, public services and other spending priorities, particularly if revenues grow more slowly than expected. Governments can manage such pressures through a combination of budget planning, refinancing, revenue measures and careful control of new borrowing, but each option involves financial and policy considerations.
At the same time, an increase in public debt does not, on its own, establish whether borrowing is sustainable or whether the funds have been used effectively. A fuller assessment would also consider the Federation’s economic growth, budget revenues, interest costs, the purpose of borrowed funds and debt in relation to the size of the economy. Borrowing used to finance productive investment may have different long term implications from borrowing that mainly covers recurring expenditure or existing obligations.
The latest figures therefore highlight two connected issues: the rapid expansion of the Federation’s debt during the first half of 2026 and the concentration of substantial repayments in the years ahead. The coming years will test the government’s ability to balance financing needs with its obligations to creditors while preserving flexibility in the budget.
The projected peak in 2031 is especially significant because it suggests that debt management will remain a major fiscal challenge well beyond the current budget cycle. Whether that pressure can be handled smoothly will depend on future economic conditions, the structure of the debt and the decisions made about borrowing and public spending. For now, the figures underline the importance of transparent debt reporting and long term financial planning as the Federation prepares for a heavier repayment period.
IMF Warns of Rising Financing Needs Across Bosnia and Herzegovina
The wider economic picture adds important context to the Federation’s borrowing. In its July 2026 assessment, the International Monetary Fund projected Bosnia and Herzegovina’s economic growth at around 2% for the year and called for credible fiscal consolidation beginning no later than 2027. The IMF also noted that increased financing needs and continued borrowing were putting public debt on an upward path.
Its report states that the Federation issued a €800 million bond in June 2026, a major financing operation during the period covered by the debt figures. These are countrywide assessments and financing details, so they should be distinguished from the Federation’s own debt totals. The IMF’s assessment provides broader context for the financial pressures facing the country, while the Federation’s debt figures illustrate the scale and timing of its specific obligations.
