ZAGREB, May 8, 2019 – Prime Minister Andrej Plenković on Tuesday commented on the European Commission’s Spring Economic Forecast released in Brussels earlier in the day and strongly defended his government’s pension reform.
The European Commission revised down its growth forecast for the Croatian economy for this year from 2.7% to 2.6%, underscoring that GDP will have finally surpassed the pre-crisis level this year. The Commission predicts that economic growth will continue to slow down to 2.5% in 2020.
“I haven’t seen the document but I have heard that it is in line with our estimates and the estimates of other financial institutions. I want to underline that our growth is healthy, it is not based on borrowing and is happening as we witness a decline in public debt and two consecutive budget surpluses,” he said.
He said that the Croatian public considered this normal, which was not the case. “The last time we had this was in 1998 when we introduced VAT… In the past two and a half years and three rounds of tax reform we have reduced the tax burden on businesses and citizens by 6.5 billion kuna, we have eliminated administrative obstacles in the amount of two billion kuna, so we are facilitating business while achieving a surplus and paying the previous governments’ guarantees for the shipbuilding industry,” said the prime minister.
He underscored that Croatia had to implement structural reforms such as the pension system reform. The pension reform has three goals – making pensions higher, making them the same for people who work the same number of years and have the same job, and making the system sustainable, Plenković said.
He stressed that raising the retirement age to 67 was not “Minister Marko Pavić or Andrej Plenković’s invention but one by the SDP government.”
“We have to see if we want changes for the better. Everyone calls for reforms, yet when a reform is launched that is in the interest of current and future pensions, there is a campaign to undermine it.”
“That’s okay, but then we have to ask ourselves what we want. I’m open to discussion, this reform was worked on with a lot of understanding about what we can do as a state,” Plenković said, adding that there was a lot of populism in discussions about the reform, which he attributed to the ongoing campaign for EU elections.
He added that the pension reform had helped the country overcome excessive macroeconomic imbalances and improve its credit rating.
More news about Croatian economy can be found in the Business section.