Finance Minister: IMF and World Bank Support Stable Government

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Finance Minister Zdravko Marić met with leaders of IMF and World Bank in Washington.

Finance Minister Zdravko Marić said on Saturday, after talks with representatives of the World Bank and International Monetary Fund (IMF), that these two institutions had a very positive view of the fact that Croatia was in a position to have a stable parliamentary majority and government, which is a necessary prerequisite for the implementation of reforms, reports Večernji List on October 8, 2016.

“The annual meeting of the IMF and the World Bank is an opportunity were we meet with the leaders of these institutions in charge of our region and Europe. At these meetings, great interest was shown for the political situation in Croatia. Without any preference, the conclusion was that it was very positive that the outcome of the parliamentary elections has brought Croatia into a situation that it will have a stable parliamentary majority and government”, said Marić.

He added that they also analyzed situation in Croatian economy. “Based on the economic growth achieved in the first six months, we can expect that the growth for the full year will be slightly higher than our forecast (which was 2 percent). They are very closely monitoring our situation with regards to public finances. Execution of the budget for the first six months showed deficit of 0.2 percent of GDP and it is very likely that we will fulfill our promise about deficit for the entire year”, said the Finance Minister.

Marić added that the emphasis will remain on further fiscal consolidation. Public debt of the general government at the end of June this year amounted to 285.7 billion kuna, which was 1.7 billion or 0.6 percent less than at the end of June last year. The public debt to GDP ratio decreased from 86.7 percent at the end of last year to 84.5 percent at the end of June this year, which is the first decrease since records are being kept.

Answering a question, Marić said that the 2017 budget was already being drafted. “By all accounts, the new government will have enough time to work on the budget for next year, but if there is some unforeseen situation, we can always count on a possibility of interim financing”, he said. He added that the outline of the budget was not yet fully known. “The next government should have to fulfill and comply with the recommendations of the European Commission and continue with fiscal consolidation, so that next year’s budget deficit would be around 2 percent of GDP”, he noted.

Possible changes to the tax system will depend on the process of forming the government. “Deadlines are quite tight. As far as the tax reform, we are working on final details. However, we are in October and deadlines are very short. We will do everything in our power to fulfill the outlined plan”, “said Marić.

Finance Minister Marić is leading the Croatian delegation at the annual meeting of the World Bank and International Monetary Fund in Washington. The delegation includes representatives from the Ministries of Finance, Transport and Infrastructure, and the Croatian National Bank.


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