ZAGREB, Sept 4 (Hina) - The Finance Ministry's projection of a 3-4 percent increase in Croatia's economy over the next two, and 5-6 percent in the next three years, is realistic as it acknowledges the real difficulties and is the
minimum which can and has to be arrived at, Finance Minister Mato Crkvenac said in Zagreb on Monday. A faster growth could be achieved already next year, but only with devaluation, printing money, and inflation, which is too high a price, the minister told a press conference called in reaction to frequent statements, including by some ministers, to the effect of economic growth projections being too modest and too careful. The Finance Ministry presented the projection at a recent conference in Plitvice Lakes, as part of a draft strategy of stability and development in the Croatian economy. The projection starts from very thorough assessmen
ZAGREB, Sept 4 (Hina) - The Finance Ministry's projection of a 3-4
percent increase in Croatia's economy over the next two, and 5-6
percent in the next three years, is realistic as it acknowledges the
real difficulties and is the minimum which can and has to be arrived
at, Finance Minister Mato Crkvenac said in Zagreb on Monday.
A faster growth could be achieved already next year, but only with
devaluation, printing money, and inflation, which is too high a
price, the minister told a press conference called in reaction to
frequent statements, including by some ministers, to the effect of
economic growth projections being too modest and too careful.
The Finance Ministry presented the projection at a recent
conference in Plitvice Lakes, as part of a draft strategy of
stability and development in the Croatian economy.
The projection starts from very thorough assessments of the
extremely difficult state of the Croatian economy - problems in
production, shortage of new products, unemployment, and
illiquidity - and the known theoretical fact that it takes 2-3 years
to come out of the "transition coma".
The projection starts from this year's 2.8 percent growth rate,
followed by an increase to 3-4 percent, with the assumption that in
2-3 years growth rates may reach 5-6 percent. The finance minister
says this realistically is the minimum which has to be arrived at,
even though Croatia will aspire to even higher rates.
"If we counted on rates over six percent, which was a pre-electoral
promise, it would call for expanding spending, increasing public
debt, incurring debt to finance spending," he said.
Crkvenac says a growth of eight, or even ten percent, would be
feasible next year, but only through devaluation, printing money,
and inflation, which he adds would lead to new structure problems.
"At this moment, the eight percent rate is in the realm of wishes,
because it lacks actual foundation, it can only be detrimental
(...) Then we would again have to pay an expensive consolidation
price. This time it won't happen because the price is too high,"
said Crkvenac.
He added the ministry's projection was oriented towards quickly
reaching European economy traits, such as economic stability with a
relatively stable currency and low inflation rate, and social and
political stability.
The finance minister reminded the draft strategy was still being
discussed at an expert level.
He rejected remarks that the strategy did not count on an increase
in foreign investment. We have calculated with direct production
investments that we plan on doubling, which means a million dollars
a year, Crkvenac said, adding this did not include investments in
company portfolios.
The minister reiterated the government had fully changed its
economic policy and evaluations on the connection between public
spending, which he said had to be reduced, and economic growth.
(hina) ha jn