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17 April 2014

Croatia cuts GDP growth forecast


Croatia cuts subsidies, investments and seeks more revenue as the cuts imposed by the government in Zagreb are part of EU budget monitoring. 2014 is set to the sixth year in which Croatia's economy has not grown.

Croatia will cut investments and subsidies and raise excise on petrol and telecom operators to reduce its budget deficit to meet European Commission requirements, it said.

The new measures should reduce the shortfall by some 1.3 billion kuna, but Finance Minister Slavko Linic acknowledged they would also stifle growth, which the ex-Yugoslav economy last achieved in 2008.

"The measures should not affect consumption by households and companies, but they will impact the economy and the GDP. We have therefore cut our forecast from 0.2 per cent to zero, which means further stagnation", Linic told a cabinet session.

Croatia, which joined the EU last July, must present to the Commision by the end of April measures to cut the gap in line with the bloc's Excessive Deficit Procedure (EDP), a tool to impose fiscal discipline in budget offending member states.

Full article



© Reuters


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