Bosnia expects to agree new loan deal with IMF: central bank chief

ROVINJ, Croatia (Reuters) - Bosnia will start talks this week on a new loan deal with the IMF as its current loan arrangement, put on hold last September, has effectively been concluded, central bank governor Kemal Kozaric told Reuters on Monday.

The International Monetary Fund said separately on Monday it would begin reviewing terms of its loan for Bosnia, which it put on hold due to the government's failure to implement agreed economic policies, from Tuesday. It said it may also discuss a new loan arrangement with the authorities.

But Kozaric said the lender has already told Bosnian officials that the 33-month aid program worth around 630 million euros ($680 million), agreed in September 2012 and due to expire in June, had been concluded.

"Right now it is clear that the old stand-by deal has been concluded, this is what we were told in Washington," Kozaric said in an interview on the sidelines of an economic conference in Croatia.

Kozaric said the last tranche under the ongoing loan, worth 300 million Bosnian marka ($166 million), would be included in the new loan, which is expected to be approved in August or September.

"In the first phase (of talks), both sides - Bosnia and the IMF - will outline their respective positions regarding feasible reforms and the size of a new loan," he said.

He said the size of the loan had yet to be defined but would probably be similar to the one agreed in 2012 for 380 million euros, which was later enlarged.

"There is a high degree of agreement regarding reforms between the entities," Kozaric said, referring to Bosnia's two autonomous regions, the Bosniak-Croat Federation and the Serb Republic.

The two regions urgently need IMF cash to plug deficits in their respective budgets that have widened after floods last year inflicted damage of 2 billion euros.

"Everybody is aware that structural reforms must be implemented with or without IMF, and perhaps it's better with the IMF because that is accompanied with funds, also from the World Bank and the European Commission," he said.

Kozaric said the European Union has supported a new loan deal with the IMF, hoping it would ease the implementation of economic reforms the bloc seeks from Bosnia.

"We were clearly told the IMF is a key player, but that the World Bank and the European Commission will also be included to support the reform process."

"I think they are working together, in a package."

He estimated Bosnia's economic growth in 2015 at 2.6 percent, a bit higher than the IMF which set it at 2.3 percent.

(Writing by Daria Sito-Sucic; Editing by Dominic Evans)