I still believe that the original sin of Croatian macroeconomic policy was committed in the summer of 1998 with the first and only revision of the state budget, which was carried out because there was more money in the account than planned.
That year, the new year began with the introduction of VAT, and projections about how much this then-revolutionary new tax would bring to the state treasury turned out to be overly optimistic. In short, by summer, several billion more had accumulated than expected, prompting the then government to hastily distribute this surplus among ministries. And that was the starting gun that marked the beginning of reckless and uncontrolled state spending.
In a way, we are returning to a similar situation. The GDP growth in the first three quarters of this year, although light-years away from what would be sufficient for us to comfortably settle the recklessly and uncontrollably spent loans, has nonetheless pleasantly surprised. Analysts still cannot agree whether it is a happy coincidence that caused this or a real recovery of the real sector, and appetites for greater spending have already awakened. What have we achieved with this year’s growth if it will already be consumed next year by the salaries of public and state employees?
When we in the Lider editorial office were thinking about what short slogan would describe what we expect from next year, we decided on this one – ‘Year of New Beginnings’. However, we did not mean a new beginning in the sense of ‘now we can spend again’. No! It is about the fact that we have seven crisis years behind us, and in front of us is the first of (as yet unknown number of) years in which things need to be set up so that when the economy hits a crisis again, sooner or later, we can overcome that crisis more easily than the one we have just emerged from. Distinguished authors we asked to present their views on the next year to Lider’s readers recognized our intention and explained it from their side.
A glimmer of optimism has returned to our economy, but along with it comes a huge dose of caution, even fear that GDP growth will be short-lived, and that its effects will not be sufficient to resolve all those structural problems that have accumulated over the years without new shocks. Primarily, the high budget deficit, that fierce pressure on the growth of public debt. Unlike all reform-minded politicians, who are declaratively ready to reform everything and anything, but do not even mention public debt, businessmen in the real sector are deeply aware of the weight of that burden. The higher the interest rates that need to be paid for old and new debts, the less possibility there is for new growth. And a greater possibility that the economy will collapse again before the seven ‘fat’ years we hope for expire.
In any case, we sincerely wish all readers that 2016 will be the ‘year of new beginnings’. Even if you have already stepped into a better future this year, we wish you to take another seven-league step in the next year so that in a year we can put on the cover of our special edition that ahead of us is – a year of abundance.
