Indebtedness will not decrease in 2007

Experts voice their scepticism towards Premier Sanader`s statement on the decrease of the national foreign debt and the growth of the GDP.

Prime Minister Ivo Sanader`s statement on the further decrease of the nation’s share in foreign debt at a higher rate of indebtedness on the home capital market was met with scepticism by economic experts and sociologists.

Economic sociologist Drago Cengic of the Ivo Pilar institue believes that this government will have a difficult time resisting the challenges of the electoral year in which those in authority usually blow up the budget through indebtedness.

The Gross Domestic Product, said Sanader at a press conference, will increase by five precent this year, and the budgetary deficit will amount to the announced 2.8%. In addition inflation in the year ahead will not exceed three percent, he said.

Decrease of national share in foreign debt

Sanader also announced a further decrease of the national share in fore0ign debt, which is planned to be achieved by a higher rate of indebtedness on the domestic capital market. He announced an even more intense attraction of resources from EU pre-accession funds, especially those for the support of agriculture. He also noted that the export of food products might cover over 70% of imports in 2007.

This government said before export is increasing and nothing came of it

- This government said before that exports are increasing and nothing came of it in the end. Home companies really do raise export rates, but on the other hand, import still increases. We should clearly see which are the export parameters by which exports and imports are calculated – Cengic said.

He added that experts should finally come up with a good programme for greenfield investments, which were still not present in Croatia. The recent growth of these investments in Serbia, Cengic says, is founded on wrong indicators, which is what happened to Croatia as well.

Increase of greenfield investments in Serbia is unrealistic, as it is in Croatia

The increase of greenfield investments in Serbia in greater only due to foreign investments in banks and telecommunications, as it used to be in Croatia. After that follows the extraction of money, of course. The second factor because of which these investments are seemingly increasing in Serbia in relation to Croatia is that the labour force is still much cheaper in Serbia than in Croatia – concluded Cengic.