Plenković satisfied that the estimates of the EC and the Government regarding Croatia’s economic growth coincide

Prime Minister Andrej Plenković stated on Thursday that it is good that the European Commission’s estimates of Croatia’s economic growth this year of 2.8 percent coincide with the estimates of the Government and the Ministry of Finance, and he assessed that their forecasts are encouraging.

The European Commission maintained its earlier estimates on Thursday that Croatia’s economic growth this year will be 2.8 percent, and 2.7 percent next year, after growth somewhat slowed down at the end of last year.

Prime Minister Plenković assessed that it is good that these estimates of the Commission fully coincide with the forecasts of the Government and the Ministry of Finance.

>>>EC expects Croatian GDP growth of 2.8 percent

The Government, in fact, based the budget for this year on an estimated economic growth of 2.9 percent.

“The Commission sees that we have made significant strides in terms of fiscal discipline and in terms of continuity of growth. When it comes to reducing public debt, they are even more optimistic than we are in terms of the speed of reducing public debt, and this also fulfills the criteria for introducing the euro, which is one of our goals,” said Plenković in response to journalists’ inquiries in Otočac, where he was at a ceremonial session of the Assembly of the Croatian Firefighters’ Association.

The European Commission in its spring economic forecasts estimates that this year, as well as last year, Croatia will record a general government surplus of 0.7 percent of GDP. This should lead to further reductions in the share of public debt in GDP – after falling to 78 percent of GDP last year, this year to 73.7 percent, and in 2019 to 69.7 percent.

“It seems to me that their forecasts are encouraging. I think that regarding Agrokor, we reacted excellently, set a legal framework, and I believe that we will complete that process within the legal deadline, that the continued increase in employment, reduction of unemployment, and opportunities provided by better absorption of EU funds will be an incentive for the Government to create a positive business environment for further growth, production, and export,” said the Prime Minister.

>>>EC: Croatian economy is growing, but lags behind comparable countries

As stated in the estimates of the European Commission, the risks regarding the forecasts arise from the results of the settlement of Agrokor’s creditors, which is yet to be achieved. “A successful outcome of the negotiations could affect the increase in production and investment of the group and its suppliers, while failure to reach a final settlement could result in financial and operational disruptions,” the Commission assesses.

It also predicts a slower emigration of Croats abroad due to strong employment growth and wage increases.

The Prime Minister was also asked by a journalist whether he is satisfied with the direction in which the proposal for the new multiannual financial framework for the period 2021-2027, which the European Commission proposed yesterday, is going, which among other things reduces the amounts for cohesion policy and agriculture by five percent each.

Plenković believes that regarding Croatia, we will be satisfied with our envelope.

>>>Majetić: Economic growth is slowing down due to the non-implementation of reforms

“Only now do the real negotiations begin. The Commission has come out with numbers, Croatia has a working group that monitors this process. Our priorities are related to cohesion policy, that is, balanced regional development, economy, entrepreneurship, youth, education, innovation, and demographic revitalization, but also traditional policies such as agricultural policy. I think we will have part of what is important to us through the issue of security, protection against illegal migration,” he emphasized.

As he said, Croatia has expressed a willingness to contribute more to the EU budget than it has done so far.

“Without any doubt, we will continue to be one of those countries that will benefit from the EU budget,” said Plenković, who also believes that the next perspective “should be a time when we catch up with those who are ahead of us.”

>>>The Government plans to reduce public debt to 66 percent of GDP by the end of its term

In the proposal for the new multiannual financial framework, the European Commission for the first time proposes linking the allocation of European budget funds to the rule of law.

“Regarding conditionality, we have certain reservations. We need to see what exactly it would relate to and how, because it is not the same that those who were in the Union before us had funds regardless of compliance with the criteria, and now this is being introduced as a novelty. From that side, we will be very cautious in formulating final conclusions,” said Plenković, reminding that the budget is ultimately adopted in agreement with the Council of Ministers, where the Croatian Government is, and the European Parliament.