Croatia to Leave Excessive Deficit Procedure?

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Finance Minister Marić is optimistic.

Finance Minister Zdravko Marić said on Saturday that situation in Agrokor was an unavoidable topic during his talks in Washington, adding that the budget revenues were in line with the projections and that he expected positive news regarding the exit from the EU’s excessive deficit procedure, reports on April 23, 2017.

In discussions during the spring meetings of the World Bank, the emphasis was put on the project of financial and business restructuring of Croatia’s motorway system, in which the international financial institution is actively involved, said Marić.

At the International Monetary Fund, in addition to macroeconomic issues, an unavoidable topic was Agrokor. Marić noted that, as a rule, international financial institutions such as the World Bank and the IMF do not monitor individual companies. “However, given the importance, size and impact of Agrokor on the Croatian economy and the region, this was certainly an unavoidable issue. The IMF and the World Bank have encouraged us to look for an active solution, which we have already started doing,” said Marić.

The IMF published its spring economic forecast on Tuesday, according to which Croatia’s gross domestic product (GDP) should grow 2.9 percent this year. “These projections should encourage us, since they are completely in line with the projections we have set ourselves,” said Marić.

Asked about current budget revenues, the Finance Minister said that the first three months were important from the perspective of implemented tax reform. “For now, everything suggests there will be no big surprises, since it is more or less in line with our expectations. Revenues from certain forms of taxes are somewhat above expectations, but in general everything is line with our projections,” said the Minister.

He also noted the continued positive economic trends, for example in industrial production, retail trade, construction. “All of us are particularly pleased with the tourist season and we all express hope, and are actively working, to solve the problem at the border crossings as efficiently and as soon as possible, so that there would be no problem in the arrival of tourists,” said Marić.

The expected publication of final data on public debt and deficit in 2016 could be followed by a positive outcome regarding the exit from the excessive deficit procedure in May. “But let us allow the European Commission to do its work, we have done ours,” he added.

The Minister also announced that the National Reform Programme would be adopted next week by the government. It will be sent to the European Commission by the end of April. He pointed out that all parts of the government worked hard on the programme. Along with the individual reforms, the convergence plan for the next three years will show how Croatia will meet the goals of its fiscal policy.

“With efforts and results which it achieved in 2016, Croatia has really turned a new page in public finance management. This document will show that we want to continue this way, ultimately leave the excessive deficit procedure and improve our credit rating,” concluded Marić.


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