The World Bank is concerned about several things in Croatia's 2007 budget, Horvai said, adding that more than about that the World Bank was worried about changes in the pension system, which he said could become a major burden on the budget in the years to come.
World Bank officials are aware that the pre-election period is not a good period for major changes, but would like the next government to know that the pension reform had already been implemented and that the government should now focus only on its adjustment.
Citing examples of such adjustment, the chief economist at the World Bank Office Croatia, Sanja Madjarevic Sujster, mentioned higher pension insurance contributions, "rewarding" late retirement and "punishing" early retirement.
The World Bank recalls that around 1.4 million employees in Croatia are financing around one million pensioners and that the 14 billion kuna ensured for pensioners means a cost of 10,000 kuna per employee.
Like other countries in the region, Croatia too is feeling the benefits of positive external developments, but in case external conditions worsen, the problem of budgetary imbalance will become more prominent.
In order to balance the budget, the government should cut spending rather than count on constant revenue growth, Madjarevic Sujster said.