S&P Global Ratings has reaffirmed its long-term and short-term issuer credit ratings of B+/B for the Federation of Bosnia and Herzegovina, while maintaining a negative outlook. This outlook stems from concerns that the new government may struggle to consolidate its budget effectively over the next few years, particularly in light of a significant increase in budget spending ahead of the general election scheduled for October 4, 2026. The agency projects a substantial budget deficit of nearly 20% of total revenue for 2026, exacerbated by a decision to reduce social contribution fees and increase state pensions by 17%. Furthermore, tax-supported debt is expected to soar to 140% of consolidated revenue in 2026, although it is anticipated to fall below 120% by 2028-2029. Despite these challenges, S&P forecasts steady economic growth with real GDP growth ranging between 1.5% and 2.7% annually through 2028. The Federation plans to issue a Eurobond in the second quarter of 2026, following a previous issuance of €350 million in July 2025. A downgrade of the rating could occur if budgetary performance does not improve significantly after the elections.