The government's strategy for economic recovery is based on fiscal consolidation, structural reforms and stimulating investments, Deputy Prime Minister and Minister of Regional Development and European Union Funds Branko Grcic said on Tuesday presenting the government's measures to boost investments and restructure the economy though its ProInvest programme.
Fiscal consolidation is already being conducted. The budget deficit was reduced in 2012 by HRK 4 billion and this year it will be capped at the level of HRK 10 billion. In addition, we've begun the process of restructuring the economy with the implementation of legislation concerning pre-bankruptcy settlements and fiscalisation as well as strengthening the role of the Croatian Bank of Reconstruction and Development (HBOR) and the HAMAG Invest agency, Grcic said.
He underscored that structural reforms were vital, as budget expenditure could not be retained at the planned levels without reforming the public sector but also reforms to the private sector, particularly industrial reforms.
The third pillar of the government's strategy are investments which are the key to economic recovery or at least to preserve existing jobs, according to Grcic.
The government foresees a growth of 6.5% in investments this year which would ensure a growth in GDP of 0.7%.
The public sector is to invest around HRK 19 billion and there is a good chance this will be achieved, the official added.
The key though lies in private investments which should reach around HRK 50 billion this year, he said.
He expressed optimism in this regard, explaining that the investment agency had 73 projects estimated at around EUR 6.7 billion registered in its data base, and that projects estimated at around EUR 400 million were already underway and several others in the pipeline were in the preparatory phase.
The government has identified 60 tasks it needs to undertake to facilitate investment procedures.
Finance Minister Slavko Linic reflected on the problem of illiquidity and said that overdue debts had been reduced in 2012 from HRK 42 billion to HRK 37 billion ear on year.
Labour and Pension Systems Minister Mirando Mrsic underscored that the government was a social democratic one and that it continued to protect the cost of labour which was evident in the recent rise in the minimum monthly wage. He added that amendments to the Labour Law were in the pipeline which would facilitate efficient company restructuring.
