Croatia’s GDP Is Growing Strongly, But Reforms Are Still Necessary

Total Croatia News

Business and financial sector representatives discuss how to speed up GDP growth in Croatia.

Governor of the Croatian National Bank Boris Vujčić said that it was necessary to adopt and implement a package of structural reforms in order to further develop the economy. This will now have to be done by the new government, reports Večernji List on September 27, 2016.

To jump start the economy, it is necessary to reform the public administration system, education, health and pension systems, as well as the way public companies are managed. These are all reforms which have been delayed for a long time, and it is now up to the new government to implement them so that the potential growth rate of GDP could be increased, said Vujčić at the second forum “How to Stimulate Regional Economic Growth and Development”, which was organized by the Faculty of Economics in Osijek.

Vujčić also said that Croatian GDP at present was “growing relatively strongly” and that there were positive effects on the labour market, but that all of this would not be enough if reforms are not implemented that will allow for medium-term GDP growth rate that is higher than the current rate. The Governor also announced that in October the Croatian National Bank would adopt new economic projections for this year and 2017, noting that the summer’s projection for this year’s economic growth of 2.6 percent was still valid, and that it was considerably stronger growth than was expected at the beginning of this year.

Economy Minister Tomislav Panenić said that he expected reforms would not be stopped due to pressures from certain interest groups. Reform means progress, but at this time, “it means giving up on certain things, and that is something which we all must accept”, said Panenić.

President of the Croatian Chamber of Economy Luka Burilović expressed hope that Croatia would get a new government by mid-October. “It is necessary to do even more in solving the situation in public finances, reducing the deficit, and increasing competitiveness in order to get a better credit rating”, said Burilović.

Branko Roglić, the owner of Orbico Group, said that the first moves of the new government should be the reduction in administration costs and taxes, and providing such business conditions to entrepreneurs that will enable them to achieve positive business results. He said that the news about the quick formation of the government were “an indication that we are on the right track”, adding that he personally had confidence in potential Prime Minister-Designate Andrej Plenković.

Deputy director of the Croatian Employers Association Bernard Jakelić said that employers expected to have better operating conditions, lower labour costs and less taxes, because that is the only way to raise competitiveness of the Croatian economy. “We think it is finally time to actually implement all of this”, said Jakelić.


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