Croatian Economy Minister Dreams of 4.5 GPD Growth

The plan for fighting economic crisis is to decrease the budgetary deficit and privatise shipyards and the energy sector.

ZAGREB, CROATIA – The Croatian government will end this year with 1.3 percent of budgetary deficit, and next year the deficit will be 0.8 percent, Croatian Economy Minister Damir Polancec said at a conference “How accession into the EU affected strategy changes of Croatian companies” at the Esplanade hotel in Zagreb.

Polancec said he was convinced Croatia could achieve a GDP growth of between 3.8 and 4.5 percent, although the Croatian National Bank governor, Zeljko Rohatinski, foresaw a growth of only two percent, while the growth of the GDP in EU countries would be 0.2 percent.

Inflation in Croatia will fall to 3.5 to 4 percent, which will positively affect the spending increase, Polancec said, adding that his ministry would further reduce the budgetary deficit and expenses, but not to the detriment of building infrastructure projects.

- We will continue the growth of investments into the construction of infrastructure projects because this will increase the growth of the GDP and stimulate small and middle-scale companies in which over 68 percent of all employees in Croatia work and which proved to be the toughest economic players. We will, therefore, be careful to maintain the liquidity of the Croatian Bank for Reconstruction and Development – Polancec said.

Privatisation of shipyards without an alternative 

Minister Polancec reiterated he could see no other solution for sinking Croatian shipyards other than privatisation. He added that he was convinced that the privatisation would succeed.

- Five shipyards received from the state 400 million kuna in aid and two billion kuna in guarantees and still they had losses of more than a billion kuna. We cannot go on like this. We are looking at hard times and we have tough decisions to make – he said.

Polancec also announced large-scale privatisation in the gas and oil sectors in the energy field to reduce Croatia’s great dependence on importing fuels.