Budget Suffers, Croatia Heading For Recession

The state budget in 2009 is boosted under all expectations, the capital market is weakening, because it is not liquid.

ZAGREB, CROATIA –

- According to those indicators we had the chance to witness so far, the trend is that Croatia is heading for recession. Branko Grcic of the Social Democratic Party (SDP) told a press conference, speaking about the macro-economic crisis and its consequences.

According to him all trends of the Croatian economy point to economic activities slowing down, the general economic climate has deteriorated, i.e. point to recession, the best indicator of which is the lesser boosting of the state budget.

- The state budget in 2009 is boosted under all expectations, the capital market is weakening, because it is not liquid and the space for investment is reduced – Grcic explained.

The SDP member points out the low level of export as a great issue, adding that Croatian trade can be called import trade. To be precise, Croatia is exposed to and dependant on foreign financing and if it were not for the world crisis, this problem would have come out after all.

- The world economic crisis has just additionally and radically multiplied these problems – Grcic said.

In addition, looking back on INA oil company raising petrol prices, Grcic did not wish to provide a party explanation as to why the prices went up, when oil prices are the lowest in history on the world market. Instead, he referred to INA`s explanation, which said they regulate petrol prices every 15 days.

- We`ll see what happens with petrol, we expect the prices to drop in 15 days – Grcic said.

Take a look at the attached photo gallery: Budget Suffers, Croatia Heading For Recession.