Marić: The EC’s assessment is similar to ours, the downgrade is due to the fourth quarter of 2015 which was below expectations

Finance Minister Zdravko Marić assessed on Tuesday that we can be satisfied with the latest forecasts from the European Commission regarding Croatian economic growth in 2016, and emphasized that the projections were made up to April 22, which means that the Convergence Program and the National Reform Program were not taken into account.

The European Commission on Tuesday lowered its growth estimate for the Croatian economy this year to 1.8 percent, down from 2.1 percent in the winter forecasts, with the main reason being poor results in the last quarter of last year.

– Growth will continue at a slow pace after the disappointing fourth quarter of 2015. Croatian real GDP increased by 1.6 percent in 2015, the first year of positive growth since 2008. The GDP decline in the fourth quarter of 0.5 percent (on a quarterly basis) weakened the momentum for growth in 2016, the Commission states in its forecasts.

– I think we can be satisfied. The EC forecast, although slightly revised downwards, is still very close to the one we used in the budget planning process for this year, said the minister, assessing that the budget is a significant step forward for Croatia considering the work on the credibility and quality of overall economic policy and statistics.

The Croatian government projects economic growth of 2 percent in this year’s budget, a general government deficit of 9.2 billion kuna or 2.7 percent of GDP, and has also announced the stabilization of public debt, expecting, according to the budget, that by the end of the year it will amount to 86.8 percent of GDP.

– The EC states that the main reason for the correction of projections for 2016 is the realization of the fourth quarter of 2015, which was below expectations, as it affected the overall activity for 2015. This was largely below the expectations of all domestic, as well as international analysts. However, it should be noted that the projections for this year that were made for Croatia were taken as of April 22, which means that the complete Convergence Program and the National Reform Program sent by Croatia to the EC were not taken into account, so this segment should also be emphasized in some way, Marić pointed out.

The Commission forecasts a deficit of 2.7 percent of GDP for this year, and public debt at 87.6 percent of GDP.