The Serb Republic's parliament adopted late on Thursday the 2006 budget of 1.098 billion Bosnian marka ($679.8 million), 16 percent higher than in 2005, despite warnings by the International Monetary Fund (IMF).
The IMF and the World Bank have warned the governments of Bosnia's two regions, the Serb Republic and the Muslim-Croat federation, as well as the central cabinet, against proposing large spending increases in their 2006 budgets.
The two agencies declined to comment immediately but the IMF has earlier blocked its $50 million stand-by deal for Bosnia over the proposed consolidated government expenditure in the 2006 budgets that was 450 million marka higher than recommended.
The Serb Republic's 83-seat parliament adopted the budget with 51 votes for, 22 against and two abstainers.
Prime Minister Milorad Dodik said the main goals of the budget were rationalisation, analysis of revenue distribution and its strict control. "The budget has both social and development components," Dodik said, adding its increase was based on estimates of higher revenues from indirect taxation.
Dodik said the budget was drafted assuming that the stand-by arrangement with the IMF would not be clinched this year, since the Muslim-Croat federation adopted the 2006 budget of 1.140 billion marka, 10 percent higher than last year's.
The central parliament adopted the budget for the joint institutions last month which at 954.6 million marka was 64 percent higher than in 2005. The increase is planned to be covered with revenues from the newly-launched value added tax.
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