There is no other choice but to reduce the budget deficit, stated the Deputy Governor of the HNB, Relja Martić, while presenting the Semiannual Report on the financial situation, the degree of price stability achievement, and the implementation of monetary policy for the first six months of 2012.
Martić emphasized that growth in Croatia has been limited for the fifth consecutive year by unfavorable developments in the environment, but even more so by the weak competitiveness of the Croatian economy, poor business climate, and lack of investments.
Growth is further slowed down by the reduction of the fiscal deficit – Croatia is approaching the threshold of 60 percent of GDP in public debt, and the burden of interest repayments is becoming increasingly heavy, especially after the downgrade in ratings.
Martić sees the only quicker way out of this crisis situation in reforms and measures that would improve the business climate and remove obstacles, thus creating stimulating, attractive conditions for investing private capital, primarily in export activities.
He pointed out that monetary policy will continue to implement a policy that guarantees a relatively stable exchange rate and relatively low inflation, along with high liquidity and a structural surplus of liquidity, in order to help accelerate the growth of credit activity and investments. The HNB’s report is being discussed by parliamentary clubs.
