Madzarevic Sujster said that the WB expected 0.5% growth for Croatia in 2015, which should pick up to 1.2% in 2016 and to 1.5% in 2017. In relation to other comparable countries, such as Bulgaria, Romania and Poland, the recovery of the Croatian economy is still weak and there is great room for strengthening it, she added.
According to the World Bank, in order to achieve macroeconomic stability, Croatia should take steps in the short term to improve tax collection, rationalise the wage budget and subsidies, reduce non-targeted social spending, finance capital expenditures from grants, and privatise or sell inessential property. In the medium term, the country should accelerate the transition to old-age retirement and discourage early retirement, streamline health costs and introduce a property tax.
Madzarevic Sujster said that such tax would be fairer and more effective than the present situation where property is actually taxed through municipal charges, the financial transaction tax and so on. The existing system costs a lot and brings little, she said.
Speaking of support to the private sector, Madzarevic Sujster said that it was necessary to improve court efficiency, reduce non-tax levies, privatise non-strategic companies, draw EU funds and reform public administration.
Addressing those gathered, Croatian Independent Trade Unions leader Kresimir Sever said that these measures seemed unilateral, textbook-like and out of sync with the Croatian reality, expressing doubt that their implementation would lead to an increase in private consumption.
Speaking of trends in the EU, WB chief economist for Europe and Central Asia Theo Thomas said that exports were the main driver of growth in many countries in Central and Eastern Europe, including Bulgaria, Rumania, Poland and to a lesser extent Croatia. In his opinion, they are partly due to foreign direct investments, but since foreign direct investments have declined due to the crisis, these countries should focus on improving the business environment.