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Luka Burilović.jpg
Photograph: screenshot / youtube.com

Croatian Chamber of Commerce (HGK) president Luka Burilovic said on Thursday that Croatia could not afford the luxury of waiting long for the formation of a new government and parliament because a country with a fragile economy should form the government as soon as possible and launch reforms.

Commenting on the state of the national economy and its trends, he told the HGK Assembly that it was visible that some things had improved and that negative trends had been stopped. "The forecast is that GDP will increase 1.5 percent this year, but until we have annual growth of 3 or 4 percent, we can hardly talk about a significant increase."

He said it was "high time policy makers took the situation seriously," adding that the impression that everything was working in this transitional period before the new government was formed was an illusion. He said the system was mainly blocked and that public companies and institutions did not make decisions out of fear and anticipation, which he said was the worst situation.

Burilovic said Croatia was not Belgium or Denmark, but a "fragile economy" which could not be without a government for six or 12 months. He said the government must be "formed urgently" to launch changes and reforms.

Speaking of the HGK, he said a lot had been done over the past 18 months, including structural reforms "which aren't over yet... We want to make the Chamber a quality service for businessmen."

The head of the HGK Macroeconomic Analyses Department, Jasna Belosevic-Matic, said the national economy was recording growth after six years and that this year GDP was expected to increase 1.5%. This is encouraging and awakens optimism, but it is questionable how justified it is given long-standing problems and dilemmas of the national economy, she added.

She said this year's growth was mainly the result of export growth and good tourism results.

The Croatian economy remains under pressure from macroeconomic imbalances such as low competitiveness, a rising public debt, poor public sector management and unemployment, which restrict economic growth, and the main challenges ahead are fiscal consolidation and structural reforms, she said.

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