The World Bank has assessed that Croatia has made progress in implementing the necessary structural reforms in recent months, so that it is very likely that it will start applying a "base case scenario" to Croatia instead of a "low case scenario" as has been the case so far, the bank's office in Zagreb said on Thursday.
If so, the bank might approve between US$450 million and $500 million via three annual PAL loans.
Among the conditions Croatia was required to meet in order to qualify for a PAL 1 are privatisation of ten state companies, amendment of legislation on land books and public administration, initiation of the privatisation of some of the companies within Croatian Railways (HZ) and restructuring of HZ.
If Croatia steps up the reform process, it could soon move to a "high case scenario", which provides for loans of up to $600 million. In order to become eligible for such a scenario, already next year Croatia should take significant steps to reduce debt growth, achieve financial consolidation, improve the investment climate and cut government subsidies.