Croatian National Bank (HNB) governor, Boris Vujcic said on Thursday that exports were expected to continue to grow in 2016 and recovery of consumption and investments would continue, adding, however, it is still necessary to implement structural reforms which will increase short

Vujcic said this at the 19th edition of the expert conference called "Croatian Money Market", held in the northern Adriatic resort of Opatija on Thursday.

The central bank governor said the structure of Croatia's economy was still relatively unfavourable, adding that more complex products and services were necessary to accelerate growth. Vujcic stressed that obstacles which make business operations more difficult needed to be removed.

Vujcic said economic growth was expected to continue in 2016, at 1.8%, adding that consumption could also go up 1.8%. He noted that salaries in Croatia were lower than believed and that this indicated that Croatia was even more competitive than believed.

Speaking of a negative inflation rate, Vujcic said this was a consequence of lower prices of raw material on the global market. "In 2016, average annual inflation of consumer prices could go down to -0.9%," Vujcic said.

According to the HNB governor, in conditions when the economic recovery has just started, inflation is low and pressures on the exchange rate are subdued, the central bank will continue pursuing the expansionary monetary policy. He also announced the continuation of repo operations and reassured the event that the HNB was adamant to keep the kuna exchange rate stable.

The governor also said that fiscal adjustment was strong last year and that it had exceeded the expectations of the HNB, the European Commission and the fiscal authorities. He added that the consolidated general government deficit was reduced to 3.2% of GDP. "The result is more favourable than the level of deficit we needed to reach in 2015 during the Excessive Deficit Procedure and Croatia has thus made a significant step forward in ending the procedure," he added.

Vujcic said Croatia's economy had seen positive changes in the past three years, adding that the economy was turning to foreign markers, which was a prerequisite for higher growth rates and better living standards. He stressed that export figures started to grow only after Croatia joined the European Union, but despite the progress, the structure of Croatia's exports was still unfavourable compared to peer countries. He stressed the importance of small and medium size companies for the export sector, adding that the main obstacle to their business activities was the institutional framework.

"I believe that the abolishment of seals is a good thing, but this should be only the beginning of much more complex changes," Vujcic said commenting on the government's decision to abolish the use of official seals.

Vujcic said that according to the World Bank's Doing Business report, Croatia's results in 2016 were below the average and that its expenses were relatively high compared to its peers. He said costs needed to be cut and administrative procedures simplified.

Related stories

Latest news

Syrian opposition rules out future role for President al-Assad

The Syrian opposition said Friday it would not accept any role for President Bashar al-Assad in the future of the war-torn country, reacting to a recent US shift saying that removing al-Assad is no longer a priority for Washington.

Russian Army integrates breakaway forces of Georgian province

Parts of the small fighting forces of the Georgian breakaway province of South Ossetia have been placed under Russian military control, Russian Defence Minister Sergei Shoigu said on Friday.

Czech Republic's Pilsner Urquell beer is now Japanese

Japanese brewing company Asahi completed its takeover of the Czech brewery Pilsner Urquell on Friday, Asahi said in a statement.

Judge approves 25-million-dollar settlement of Trump University case

A US district judge on Friday approved a 25-million-dollar settlement of lawsuits and state fraud allegations against Trump University, the US president's now-defunct business venture.

Former Thai premier Thaksin to junta on reconciliation: 'Cut me out'

Former Thai prime minister Thaksin Shinawatra on Friday announced that he is not interested in the junta-led reconciliation process, three days after the junta handed him a half-a-billion-dollar tax bill for his past business deal.

Dalic: We welcome possible deal between Agrokor and banks

The government welcomes the possibility of an agreement being concluded between the Agrokor food company and creditor banks, and the bill on vitally important companies is not a fallback plan but the result of the government's care for the overall economic and financial stability of Croatia, Deputy Prime Minister and Minister of Economy Martina Dalic told a press conference in Zagreb on Friday.

Croatia, China sign action plan for cooperation in agriculture

The Croatian and Chinese ministries of agriculture on Friday signed an action plan for cooperation in the field of agriculture for the period 2017-2018, the Croatian ministry said in a statement.

ZSE indices up, Agrokor shares in focus of investor interest

The Zagreb Stock Exchange (ZSE) indices on Friday rose by more than 1.8%, with stocks of the Agrokor food and retail concern being in the focus of investor interest again.

Berlin police defend handling of Berlin market attacker

Berlin police defended themselves on Friday against accusations that they stopped surveillance on Berlin Christmas market attacker despite knowing in June 2016 he was dangerous.

Croatia, creditors tailor emergency measures to save tottering giant

Croatia's tottering retail and food giant Agrokor reached an agreement with its creditors, putting its debts standby and allowing it to continue working during emergency restructuring, the Croatian branch of Austria's Erste Bank said Friday.

Agrokor's creditors say standstill agreement to go into force today

A standstill agreement regarding the Agrokor concern's existing financial obligations to banks will take effect on Friday, additional capital will be injected into the concern in the coming days and the concern will be actively restructured, which includes a change of its management, it was said on Friday after a meeting between Agrokor's suppliers and creditor banks.

Palestinians, UN slam Israel's new settlement plan

Palestinians, Israeli activists and the UN lambasted the government of Israeli Prime Minister Benjamin Netanyahu on Friday, a day after it gave the go-ahead for the first new West Bank settlement in a quarter of a century.

South Sudan rebels release three abducted foreign oil workers

South Sudanese rebels have released three foreign engineers they abducted in early March in the oil-rich Upper Nile region, Foreign Affairs Ministry official Mawein Makol Arik said on Friday.

Turkish opposition: Imprisoned party chief has gone on hunger strike

The head of Turkey's pro-Kurdish opposition party has launched a hunger strike from prison.

European leagues threaten Champions League schedule clashes

The European Professional Football Leagues (EPFL) on Friday threatened schedule clashes on Champions League matchdays in an ongoing dispute with the governing body UEFA.

Danish court revokes citizenship of IS volunteer

A Danish appellate court on Friday stripped a man of his Danish citizenship for volunteering to fight for the extremist Islamic State in Syria.

Banks and Agrokor agree on key elements of standstill agreement

Member banks of the coordinating committee of financial creditors and representatives of the Agrokor food company have in principle agreed on key elements of a standstill agreement, which is expected to be signed later today, announcing changes in the company's management team, Erste Bank said in a statement on Friday afternoon.

Syrian man on trial in Sweden; mosque attack labelled terrorism

A Syrian man went on trial Friday in the southern Swedish city of Malmo, charged with terrorism and arson after an attack last year on a building used as an assembly hall by Shiite Muslims.