Croatia to rebalance 2014 budget by end-March to meet EC recommendations

By bne IntelliNews December 13, 2013

Croatian finance minister Slavko Linic said on Dec 12 the government will by end-2013 send the European Commission the set of measures for reducing the 2014 fiscal deficit and will revise by end-March the 2014 budget bill - as a response to the excessive deficit procedure (EDP) the EC is launching against the country, business portal SEEbiz reported.

Linic told a press conference after the cabinet meeting that by adopting its investment plan of 2014 on Thursday, Dec 12, Croatia already sent a message to the EC about its intention to reduce the deficit. Under the plan, the country hopes to attract HRK 73.1bn (EUR 9.6bn) of investments next year, up from planned HRK 66.6bn in 2013, which will lead to mild growth of consumption.

Linic also said that one of the measures to reduce the budget deficit would be rationalising the health and education sectors, which however will not be related with wages and pensions cuts in that systems.

Earlier in December, the parliament endorsed next year's budget bill with planned deficit of HRK 17.5bn, or 5.0% of the projected GDP. The EC, however, recommended as part of the excessive deficit procedure that Croatia should target reducing next year's gap to 4.6% of GDP, which is an annual improvement of the structural balance of 0.5% of GDP in 2014.

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