zdravko marić.jpg
Photograph: HINA/ Damir SENČAR /ds

Finance Minister Zdravko Maric said on Tuesday that he would prepare macroeconomic prerequisites over the next two weeks relating to economic growth, inflation and personal consumption, underscoring that there would be no additional changes to the tax system.

"In the next two weeks we will prepare, complete and update macroeconomic prerequisites for growth, inflation and personal consumption and other elements that will be key to planning the revenue side of the budget," Maric told reporters after a meeting where he presented this year's budget guidelines to the cabinet ministers.

Maric underlined that this year there would no additional changes to the tax system. "Hence, the tax system should remain unchanged," he said and added that the emphasis of this and following meetings would be on the expenditure side of the budget.

He added that this morning's ministerial meeting was just one step in the entire budget planning process and an opportunity to present the ministers with a starting framework to prepare their budgets for 2016.

The ministers were informed of the findings of comparative analyses made by domestic and foreign experts about the state of the government budget and public finances.

"We have a very clear message that the situation in public finances, primarily with regard to the public debt that has grown over the past years, is a crucial and major variable given that Croatia's credit rating is two steps below the investment grade," Maric said.

Therefore it is important to send a message with this budget (for 2016) that we are working on improving the outlook for the Croatian credit rating which is currently negative, the minister said.

We should improve the outlook first and then in the remainder of our term we should ensure that our credit rating is revised upward, the minister added.

The S&P and Fitch credit rating agencies have confirmed Croatia's rating at "BB", which is two grades below the investment level, with a negative outlook, while Moody's has kept Croatia's rating at one notch below the investment grade, also with a negative outlook.

As for the expenditure side of the budget, Minister Maric appealed for a little more patience, explaining that it would be irresponsible to give any details at the moment.

He said that he counted on dialogue with the social partners, and announced that he would soon convene a meeting with trade union leaders.

Asked by reporters whether he still maintained that the expenditure side should be curtailed by 4-4.5 billion kuna, Maric said that corrections should be made to reduce the budget gap to below 3% of GDP.

He reiterated that the budget prepared by the new government that took office last month should be adopted by mid-March.

(EUR 1 =HRK 7.6)

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