After inflation reached a record 8.4 percent in July, its growth slowed in August, but remained very high at 7.4 percent. What should real measures to combat inflation look like? The answer to this question was sought at a gathering organized by the Croatian People’s Party.
Participants in the gathering agreed that concrete measures to combat inflation need to be adopted as urgently as possible, and they must be implemented as soon as possible because citizens are the only ones bearing the burden of inflation through a reduction in real wages. Currently, the economic situation in Croatia is determined by inflation and stagnation of economic development, it was warned at the gathering. The capacity to reduce inflation exists within the government, emphasized the leader of the HNS, Radimir Čačić. He pointed out that political will is needed to make essential strategic decisions. Čačić sees room for reducing inflation in setting priorities and transparency in capital investments, which he estimates at 16 to 17 billion (budgetary plus off-budget).
Advisor to the President of the Republic of Croatia for the economy, Dubravko Radošević, warns that there are no simple solutions for controlling inflation, and advocates for the rationalization of public expenditures, a restrictive monetary policy, and control of systemic risk in Croatia’s financial sector. Economist Velimir Šonje believes that price relationships have permanently changed. Real prices of food and energy have increased dramatically, perhaps forever, warns Šonje and emphasizes that productivity must increase in Croatia, and he also advocates for an analysis of capital investments. All participants in the round table emphasized the need to reduce the tax burden on citizens.
