The privatisation of the Croatia Osiguranje insurance company and the Croatian Postal Bank (HPB) is entering the final stage and a tender is expected to be advertised by early May, Finance Minister Slavko Linic told the parliamentary Finance Committee on Tuesday.
Linic presented a draft budget revision based on an economic growth projection of 0.7% which is significantly lower than the earlier outlook of 1.8%.
He explained that the growth rate had been modified due to a series of problems in government investments, the disarray in the construction sector, but also because the private sector was not making any significant investments despite government incentives.
He underscored the problem with the Split-based Konstruktor company which in January halted all investment activities in road construction.
He said that budget expenditure could be fairly close to revenue if it were not for interest due on an enormous public debt of around HRK 180 billion.
He claimed that new debts were being created due to the restructuring of the shipbuilding industry and railways but that these were all problems the incumbent government inherited because of irresponsible policy in the past period. He noted that public debt was nearing 60% of GDP.
He was questioned about HRK 500 million itemised under 'other revenue', to which he answered that this represented revenue to be drawn from the profits of the national oil company INA and the central bank.
"Last year we left INA's complete profits in the company. However, the company has not embarked an an investment cycle and so it would be absurd to leave it all that profit again this year", he said.
