ZAGREB, March 15 (Hina) - This budget will not be particularly popular, but will give a perspective to Croatian economy and the overall society, Croatian Finance Minister Mato Crkvenac said Tuesday explaining this year's budget before
the Croatian National Sabor's House of Representatives. We would be more satisfied if we could have motioned a different budget, but it is for large part determined by the bad situation in the economy and huge debts, he said.
ZAGREB, March 15 (Hina) - This budget will not be particularly
popular, but will give a perspective to Croatian economy and the
overall society, Croatian Finance Minister Mato Crkvenac said
Tuesday explaining this year's budget before the Croatian National
Sabor's House of Representatives.
We would be more satisfied if we could have motioned a different
budget, but it is for large part determined by the bad situation in
the economy and huge debts, he said. #L#
Six and a half billion kuna (US$812.5 million) of Croatia's foreign
debt have to be repaid this year, debts of budget users and
extrabudgetary funds amount to 9.3 billion kuna (US$1.16 billion),
government guarantees have reached 18 billion kuna (US$2.25
billion), and bills of exchange of one billion kuna (US$125
million) are up for payment this year, Crkvenac said.
Prior commitments have blocked about 20 per cent of the budget, he
stressed.
Besides the debts, the budget is under the burden of bad tendencies
in the economy. Gross domestic product has been slipping for six
consecutive trimesters, production and retail prices have been
rising faster than the average in the past several months and the
rate of unemployment has reached a record 21.3 per cent.
More than 351,000 people are unemployed, and in just the first two
months of this year more people lost their jobs than what had been
planned for the entire year, Crkvenac said.
He added that Croatia's trade with the world was continuously
dropping and the number of pensioners was in excess of one million,
while irrecoverable debts had amounted to 28 billion kuna (US$3.5
billion), which presented an enormous illiquidity problem.
All this is reflected in the budget, Crkvenac said, adding that
there had been several options.
We could have continued with the policy of maintaining economic
stability and sustaining social peace through rehabilitation,
without solving any problems.
However, we opted for a different approach -- to maintain economic
stability with significant curbing of budgetary expenditure and a
decrease of tax burdens, Crkvenac said.
This would, he said, create conditions for a more dynamic economic
activity and a stimulation of employment. It is not possible to
achieve this over night and it seeks self-sacrifice, he asserted.
Commenting on criticism that the budget was not developmental,
Crkvenac said this was not correct, because, among other things,
the payment of debts of 3.6 billion kuna (US$450 million) as
envisaged in the draft budget, will mark the beginning of solving
the problem of illiquidity.
Resources for agriculture, crafts and entrepreneurship have been
increased, and tourism is stimulated. Resources for science,
education and culture also rose, which is an investment in the
future, Finance Minister Crkvenac said.
Moreover, capital budgetary investments amount to 5.2 billion kuna
(US$650 million), so works on many infrastructure projects will
continue.
Crkvenac concluded the budget contained elements of self-
sacrifice, but also social and developmental elements, which
creates conditions for a healthy long-term economic development.
(hina) lml mm