Addressing a symposium on Croatian economic policy in Opatija, Sanader said that the proposed budget was development-oriented and socially sensitive because it would secure investment in the economic sector and meet all requirements for social expenditures and transfers to citizens.
The budget provides for 14 billion kuna for investment and about 8.5 billion kuna for science, while about five billion kuna will be set aside for subsidies, the prime minister said.
The draft budget for 2005 as well as those for the 2005-2007 period are based on a projected annual economic growth rate of four to five per cent. Growth is expected to be generated primarily by investment in crucial infrastructure, while at the same time the consolidated government deficit should be cut down to 2.9 per cent of Gross Domestic Product in 2007.
This deficit is expected to be reduced from 6.3 per cent in 2003 to 3.7 per cent of GDP next year and to 3.3 per cent in 2006 in order for Croatia to meet this Maastricht criteria in 2007, Sanader said.
He announced further investment in the public sector, particularly in road infrastructure and the energy sector, adding that the country's energy needs would increase with the growth of economic activity.
Sanader said the proposed budget was also expected to meet economic challenges set before Croatia by the process of integration with the European Union, and that a programme with solutions to those challenges would be contained in the Pre-Accession Economic Programme, which is to be completed by December 1.
The prime minister said that the strategic goal of his government's economic policy was to achieve economic growth and stability, raise the standard of living, increase the competitiveness of the Croatian economy and adapt it to the European market.
Apart from strengthening its economy, Croatia must also strengthen its justice system, simplify administrative procedures, make public procurement more transparent and reform the education system.
Speaking of government activities until the end of the year, Sanader said that the Profit and Income Tax Act would be amended to establish more effective forms of tax monitoring, and that One Stop Shops would start operating.
Economists attended the symposium on Croatian economic policy for 2005 were also addressed by Serbian Deputy Prime Minister Miroljub Labus, who spoke of cooperation between the two countries in the past and in the future.
Labus said that investments by Croatian entrepreneurs accounted for about three per cent of all investments in Serbia in 2003, and that their share would significantly increase this year.
Speaking of the process of privatisation in Serbia, Labus said some 60 large companies and eight large infrastructure firms remained to be privatised, and that 2005 would be marked by the restructuring and privatisation of public companies.
(1 euro = 7.58 kuna)