Croatias GDP to contract 1.9% in 2012 c-bank governor.

By bne IntelliNews October 29, 2012
Croatias GDP is expected to shrink a real 1.9% in 2012, news agency HINA quoted central bank governor Boris Vujcic as saying. Thus, the countrys cumulative economic contraction will amount 10% for the last four years, Vujcic told an annual economic conference held in Zagreb last week. He added that the government has to concentrate on reducing public spending, noting that fiscal consolidation has been mainly on the revenue side and not enough on the expenditure. Vujcic criticized the government for not doing enough to find a new model for stimulating growth. He stressed that a favourable investment and business climate that attract private capital would stimulate the economic growth. The increase in public debt from 29.3% of GDP in 2008 to about 53% of GDP at present is unsustainable, he added. The EBRD worsened its forecast for Croatia's 2012 economic growth to minus 1.9% in its latest Regional Economic Prospects report published on Oct 25 from minus 1.2% projected in July. In 2013, the EBRD sees the economy recovering to a growth of 1.2% versus 1.5% expected in July.

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