ZAGREB, February 14, 2019 – Public Administration Minister Lovro Kuščević on Thursday called well-intentioned the International Monetary Fund’s criticism that Croatia should reduce the state administration, saying the government was working on it.
“I agree the state administration and operations should be downsized. However, the government is working on it. Don’t forget that we are in the third round of the tax reform, that we have eased the burden on citizens, local and regional self-government units by several billions, that GDP is growing and that the financial growth outlook has also improved,” Kuščević told the press.
A journalist remarked that he must admit that no one had the courage to downsize as much as wanted by the IMF, he said it could not be done by saying, “now we’ll downsize by 10, 20, 30%.”
“The Ministry is working on a stream of projects aimed at downsizing public administration, but these projects must provide the answer as to which administration, how many people, which jobs and who will take them on, and digitisation in itself will result in downsizing,” said Kuščević.
A journalist remarked that the IMF said the government should be more ambitious, to which he replied that the criticism was well-intentioned and that the government would analyse them.
The IMF executive directors established that in 2018 Croatia continued its fourth year of positive economic growth as well as its fiscal consolidation albeit at a slower rate, and they also call for improving the country’s business climate and rationalisation of the public companies’ sectors as well as improvements in bankruptcy legislation.
“The economic expansion continues, driven primarily by private consumption and exports of goods and services,” the IMF says in a press release after the conclusion of 2018 Article IV Consultation, on 8 February.
The IMF directors called for more ambitious restructuring of public administration including by reducing high public employment outlays and reducing the fragmentation in sub-national levels of government.
More news on the business climate in Croatia can be found in the Business section.