The development plan must be based on the strengthening of exports, reduction of unemployment and augmenting of productive employment, which will increase competitiveness and the GDP growth rate, while social cohesion will be maintained, Mesic said at the presentation of a new analysis of Croatia done by the Vienna Institute for Economic Research (WIIW).
Deputy Prime Minister Damir Polancec said that this development strategy should be adopted by the end of the year, with the consensus of all interested parties, after discussions with business people, economists, employers, trade unions and the government.
He called on all with proposals and know-how to contribute to the development strategy.
Polancec also spoke about the reforms of the health and pension sectors, measures to prevent the grey economy and step up privatisation, and announced strategic projects for tourism and the energy sector.
The analysis called "Croatia: Slowed Down Growth and Alternative Policies" compares significant macroeconomic factors for Croatia, five new European Union members (the Czech Republic, Hungary, Poland, Slovakia, Slovenia), and two which are expected to join soon (Bulgaria, Romania).
The WIIW assessment is that Croatia has a problem of maintaining current movements and trends and that this can affect the strengthening of competitiveness in the globalised world.
According to the analysis, Croatia's economic growth is slowing down, amounting to three per cent this year, lower than in other transition countries, where it ranges from 3.4 to 5.5 per cent. In 2006 it is expected to be a minimum three per cent as well, whereas in other transition countries it is expected to be between 3.4 and six per cent.
The analysis notes that in 2004, Croatia realised 38 per cent of Austria's GDP per capita, like Poland and better than Bulgaria and Romania (25 and 26 per cent respectively), but worse than the Czech Republic and Slovenia (58 and 64 per cent of the Austrian GDP per capita respectively).
The analysis draws attention to high public expenditure and the constantly growing public debt. It notes that the external debt is high and that while the share of banks and companies in the external debt is growing, the share of the state is decreasing.