Finance Ministry state secretary Ante Zigman said that macroeconomic trends were very favourable and that such a situation would continue in the third quarter. He said that the GDP growth rate was 4.8 per cent higher and that unemployment was down from 17.2 to 16 per cent and was the lowest in the past few years.
Zigman said that this year GDP would be nearly five per cent and that further fiscal consolidation was expected, noting that tax revenue had increased 11.1 per cent as a result of intensified inspections and increased economic activity.
In the first half, profit tax revenue went up 30 per cent, and increases in revenues from value added tax, sales tax and excise tax were also recorded. Expenditure was about 47.8 per cent of the budget, Zigman said, adding that the state budget deficit was cut by more than a half compared with the same period last year.
Damir Kajin of the Istrian Democratic Party said that Croatia had the lowest economic growth rate in Central and Southeast Europe. Tax collection is relatively good, but the economic and social circumstances are not, he said.
Citing a deteriorating balance of payments and growing insolvency, Dragica Zgrebec of the Social Democratic Party said that the foreign debt had reached a record 27.5 billion euros.
The government cannot get a passing grade for what it has done in terms of economic development and the SDP will not support the report, she said, noting that only now, at the end of its third year in office, has the government started projects that should have already been completed.
The debate resumes tomorrow.