PM Kosor: Croatia is not in deep financial crisis.

By bne IntelliNews August 27, 2010
PM Jadranka Kosor said that the country was not in a deep financial crisis and that it succeeded to manage its public finances and meet its foreign and domestic obligations. She explained that the government was continuing the talks with banks in order to see what they could do to help overcome the crisis and spread its burden. We note that the government has forwarded to the parliament a budget revision, which envisages an increase of the 2010 budget deficit from 2.6% of GDP to 4.2% of GDP. Total revenues were seen down by HRK 4.5bn (EUR 619mn) to HRK 14bn in 2010, while the total expenditures rose by HRK 898mn to HRK 122.3bn. PM Jadranka Kosor stressed that the budget revision was not election oriented and said it aimed to protect standard of living and boost the economy. The budget revision envisages a reduction of the ministries' costs by HRK 1.5bn. The increase in the total expenditures has been attributed to additional funds for pensions (HRK 356mn), for jobless people (HRK 386mn), for agricultural subsidies (HRK 600mn), for natural disaster damages (HRK 300mn), for childbirth allowances (HRK 100mn) and for a referendum on amendments to the labour act (HRK 170mn). The government also decided to increase tobacco excise from 30% to 33% of the retail price and excise on lead-free gas from HRK 1.65 to HRK 1.90 per litre. The budget revision was based on the projections for the GDP drop of 1.6% y/y in 2010.

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