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Croatia a Middle-Income Country

The World Bank (WB) has classified Croatia among the countries of Central Europe and the Baltics with middle income, as the only non-member of the European Union in that group, said Croatian Finance Minister Ivan Šuker after a meeting with WB leaders in Washington.

Šuker stated this, reported Croatian Radiotelevision, after a meeting with WB Vice President for Europe and Central Asia Shigeo Katsu and WB Executive Director Herman Wijfels. This classification will take effect on January 1, 2008.

“At the meeting with Vice President Katsu, we received compliments for the reforms we have implemented over the past four years. Katsu is also satisfied with the implementation of the PAL 2 program,” said Šuker. PAL 2 is the Program Loan for Adjustment, aimed at projects in the implementation and preparation of health and justice reform projects in Croatia, which will continue next year. “Croatia is ranked second among the 10 countries that best implement reforms,” said the Croatian minister, recalling the recent WB report on the implementation of reforms. He assessed that Croatia’s credit rating would certainly increase after all those good ratings in the past month, but this will not happen due to the elections.

Speaking about the economic growth forecasts for 2007, which the IMF published on Thursday, Šuker said that for Croatia, this estimate has been revised upwards – from 4.6 percent to 5.6 percent, which aligns with domestic forecasts and EU forecasts for Croatia of 5.7 percent, while he personally expects growth to be around six percent. Regarding Croatia’s external debt, which continues to grow and has exceeded 30.5 billion euros and 85 percent of GDP, Šuker said that “external debt needs to be kept under control, but it is not alarming. The share of the state in external debt has decreased from 34 to 21 percent,” he said.

Minister Šuker leads the delegation of the Ministry of Finance of the Republic of Croatia and the Croatian National Bank at the Annual Meeting of the World Bank and IMF, which is taking place this weekend in Washington.