Marić confident that this year’s budget deficit will be lower than 2.6 percent, next year aims for 2 percent

Technical Minister of Finance Zdravko Marić stated on Wednesday that he is confident that this year’s plan to reduce the budget deficit to 2.6 percent of GDP will be exceeded, and that for the next year, there are plans to further reduce that level to 2 percent.

– For this year, the budget deficit plan was 2.6 percent (of GDP) and we still stand by that, it is unquestionable that we will achieve that plan, and I am sure we will do even better than that plan. For next year, our plan, not only in accordance with the recommendations of the European Commission but also our expectations, is that the deficit should go further down, towards 2 percent, Marić stated to reporters at Markov trg after the Government session.

He reminded that for the next year, budget obligations amount to 27 billion kuna, with two domestic bonds maturing at 9.5 billion kuna and one international bond at 1.5 billion dollars, as well as about one billion euros in principal debt of the road sector (HC, HAC, and ARZ) and expressed confidence that there will be no problems in refinancing these obligations.

– This is something we have already started working on and are working on, and that refinancing, if we continue like this, will certainly not be in question, emphasized the technical Minister of Finance.

He also reflected on the positive economic trends in the first half of this year, stating that “all these positive numbers have not yet achieved their full purpose until they are felt by every citizen.”

– Economic growth of 2.8 percent in the first half of this year is good after six years of recession, but it cannot and should not satisfy us. This is economic growth that should serve as an additional argument for all of us to continue implementing structural measures and to accelerate them, to raise the potential of the economy, and in no case should it be an excuse for delaying them, he said, adding that there has been “too much delay in our past and we need to now commit even more strongly.”

The goal, he explained, is to achieve economic growth that will generate jobs and contribute to demographic renewal “because in recent years we have witnessed negative demographic trends and the emigration of our youth from the most dynamic sectors, especially from some regions, such as Slavonia, which has been quite devastated in recent years,” and holds great potential.

Zdravko Marić: Croatia could exit the Excessive Deficit Procedure in 2017

At the session of the technical Government, the first after the early parliamentary elections, the report on the execution of the state budget in the first half of this year was accepted. In the first half of this year, the consolidated general government budget deficit, according to national methodology, amounted to 518 million kuna or 0.2 percent, while the state budget deficit was 2.4 billion kuna or 0.7 percent of GDP, which is 5 billion kuna less than in the same period last year.

– We have not seen such a low deficit for a long time, or almost a balanced budget, said Marić at the Government session, emphasizing that he will “keep the budget maximally under control until the end of the year.”

He added that he expects the continuation of such trends, so Croatia could exit the Excessive Deficit Procedure next year, while rating agencies could improve the country’s credit rating.