Primorac: In December, We Expect Inflation to Slow Down

Finance Minister Marko Primorac stated on Friday that inflationary pressures remain significant, but the government expects inflation to slow down in December, while measures from the European Central Bank to curb it may have a more pronounced impact in the first half of next year.

As he told reporters after a government meeting, when discussing the entire year of 2022, expectations are that inflation will be slightly above ten percent. Primorac believes that the ECB’s measures, which raised interest rates for the fourth consecutive time yesterday to combat high inflation, may have a more pronounced effect in the first half of next year.

– We expect further increases in these reference interest rates and hope that this will reduce inflationary pressures – said Primorac.

Primorac reiterated that maintaining price stability is primarily within the domain of the Croatian National Bank, and it should be consulted more frequently regarding measures and policies to curb inflation.

When it comes to recording and monitoring data, the State Bureau of Statistics is responsible, so in Primorac’s opinion, the Ministry of Finance is not the authority competent to elaborate on this topic in any detail.

– We can say that we are concerned about this situation and that it is not pleasant for us, and that we have tried to do everything in our power to ensure that government measures do not act inflationarily – said Primorac.

When asked if his statement meant that the CNB had missed something, the finance minister said he could not interpret or comment on that, reminding that the monetary authority is independent.

– But I would like to hear more intense statements from representatives of the monetary authority when we talk about inflation – Primorac conveyed.

‘Understand the Seriousness of the Situation’

He called on all stakeholders who are in a position to do something about curbing inflationary pressures, including businesses that set retail prices, to understand the seriousness of the situation as much as possible.

– We also appeal to them to be accommodating in these circumstances, at least if I can put it that way – said Primorac.

He stated that the situation regarding inflation is fundamentally very simple, so the greater the consumption and investments, as well as the demand for public and private goods and services, the more intense the ‘heating up’ of inflation.

– Therefore, we can say that in terms of combating inflationary pressures, in addition to raising interest rates, any intention to limit consumption and investments could contribute to stabilizing this situation. When and to what extent we can expect that, I really cannot say anything more concrete – said Primorac.

‘Advances in the Segment of Officials’ Salaries’

Considering that the Ministry of Justice and Administration withdrew a package of legal amendments regarding the salary system yesterday, which among other things provided for an increase in the base for calculating the salaries of state officials, journalists asked Primorac if he regretted that his salary would not increase.

– In several media appearances, I have said – if I had been concerned about my salary and income, I would never have accepted this duty. As far as I am concerned and my income, I would never advocate for that for personal reasons, but I believe that salaries, especially when we talk about officials’ salaries, are at a level that is absolutely not attractive to people who are professional, skilled, highly educated, and capable of doing this job – asserted the finance minister, adding that besides income, there are other motives for engaging in official duties, such as the desire to do something good for the Republic of Croatia.

However, in general, for the long-term stabilization and sustainability of the system, Primorac believes that significant advances in the segment of officials’ salaries should be made in the foreseeable future.

– I even consider it good that a decision is not made to increase our salaries, but I would absolutely support a decision to increase the salaries of anyone who will come here for the next term, for example, at the end of the mandate. I think that would really be necessary – is Primorac’s opinion.