FinMin: Statistics send clear message to EC, rating agencies

Croatian Finance Minister Zdravko Maric said on Thursday that the latest figures from the national statistical office on the deficit and public debt in 2015 sent a clear message to the European Commission that Croatia wanted to exit the Excessive Deficit Procedure (EDP) and to rating agencies that public debt would continue to decline. 

"As we said at the start of our term (at the beginning of this year), in 2016 we have two main economic goals - stepping up economic growth and employment and stabilising public finance," Maric said in a statement for Hina, adding that the latest figures, compiled in line with Eurostat's ESA 2010 methodology, pointed largely to that.

Croatia's consolidated general government budget deficit in 2015 was HRK 10.7 billion or 3.2% of Gross Domestic Product, while consolidated general government debt reached HRK 289.7 billion or 86.7% of GDP, show figures in a report on excessive budget deficit and general government debt in Croatia, presented at the National Bureau of Statistics (DZS) earlier in the day.

Revised DZS statistics show that the general government budget deficit in 2014 was HRK 18.1 billion or 5.5% of GDP, while the general government debt at the end of 2014 was HRK 284.2 billion or 86.5% of GDP.

The general government debt in 2015 increased 1.9% from the end of 2014, which is a two and a half times lower increase than in 2014 and the lowest debt growth rate since the start of debt measurement according to the ESA 2010 methodology in the EDP, DZS officials said.

In 2015 Croatia for the first time recorded a general government primary surplus of HRK 1.22 billion or 0.36% of GDP.

"This is a very clear message to the European Commission that we want to take certain steps to exit the EDP. With the planned deficit, which is the lowest general government budget deficit since 2008, and with the activation of state property... we plan to not only stabilise but also mildly lower the share of the public debt in GDP. ... I believe that this is also a rather strong message to rating agencies," said Maric.

This year's budget puts the general government deficit at HRK 9.2 billion or 2.7% of GDP.

The government has also announced the stabilisation of public debt and projected it at 86.8% of GDP in 2016, while by 2018 the debt is expected to be reduced to 84.7% of GDP.

This year the government also forecasts a primary surplus of 1% of GDP.

Maric said that the government had set as its goals a 2% GDP growth rate, fiscal adjustments, and a mild reduction of the public debt's share in GDP.

"It is certain that in the years to come that share will continue to decline. By the end of its term the government wants to achieve an 80% share of public debt in GDP. On the other hand, we do not want to jeopardise economic growth, which this year is projected at 2% and which this government has the ambition to step up," said the minister.

A public procurement procedure is open until May 3 whereby the State Property Management Office (DUUDI) wants to find an advisor for a starting independent appraisal of a portfolio of state-owned companies before a decision is made on their privatisation. On the list of such companies are the HAC motorway operator, the JANAF oil pipeline operator, the HEP power supplier, the Plinacro gas company, the Hrvatske Sume forest management company, the Croatian Lottery, the ACI marina operator, the Jadrolinija shipping company, Zagreb Airport, the Croatian Post, the Petrokemija artificial fertiliser factory and the Brijuni Riviera hotel company.

Asked if those companies would be sold, Maric said that he did not want to comment on it for the time being.

"Individual segments of state property are being appraised and based on that and some other factors, we will make an integral proposal. I would not speculate about any names for now... We can expect to raise the level of activation of state property not only for the sake of patching up budget holes, but quite the contrary, for the sake of raising the value of that property, which is not being used fully and in the most efficient way," he said.

He confirmed that a minimum EUR 200 million was planned to be earned by the end of the year from the activation of state property.

Last update: Thu, 21/04/2016 - 19:55
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