The professor from the Vienna Institute for International Economic Studies was speaking at Lider magazine's 5th conference, "Big Plans Day - How to prepare a company for business in 2014."
Speaking of projects for the region in 2014, Gligorov said the growth model of the economies in the region until 2008 was easy and based on cheap borrowing. Such a model is no longer possible and the money will hardly be as cheap, making it necessary to find a new growth model, he added.
He said efforts were being made around Europe to make private sector investments the drivers of growth and that this was a particular problem for countries in transition because they were used to foreign and not domestic investments.
The key question is how to encourage them when the bulk of Croatia's private sector is insolvent and there is uncertainty as to how new products will sell, given that both domestic and foreign demand remain low.
Until that issue is solved, recovery will be very slow, as evidenced by the official projections of the countries in the region, under which growth above three per cent is not expected before 2016, said Gligorov.
The Croatian government said yesterday it expected a 1.3% GDP growth in 2014, 2.2% in 2015 and 2.5% in 2016.
Deputy Prime Minister Branko Grcic said at the conference today the forecasts were not too optimistic because consumer and industry optimism were growing, GDP decline had slowed to 0.7%, all important GDP components were recording growths for the first time in five years, and Croatia's competitiveness had recorded a mild improvement.
Even though the high deficit and the public debt cannot be dealt with overnight, the government has come up with a new reform package which will cost the state budget in 2014 but its benefits will be visible in the years ahead, said Grcic.
As for criticism that the government was two years late with those reforms, he said reforms had been carried out, helping to save HRK 4 billion.
The government can slash the budget by another HRK 3-4 billion but it would then have to scrap public investments. Instead, by reducing contributions and rescinding a tax on reinvested profit, more than HRK 4 billion has been made available to the economy, said Grcic.
The Croatian Employers' Association will soon present its reform measures, its president, Ivica Mudrinic said, adding that it would demand the government to be brave and create in the shortest time possible, conditions to implement these measures, "because the only way out of the roundabout we are in is a quantum leap."
(EUR 1 = HRK 7.5)