hgk Croatian Chamber of Commerce.jpg
Photograph: HINA

The Croatian Chamber of Commerce (HGK) says that the National Reform Programme, adopted by the government on Thursday, is focused on areas where reforms are needed the most, and that the Convergence Programme indicates positive trends in public finance.

In order for the National Reform Programme to produce desired results in accelerating growth and raising living standards, it is important to ensure the speedy and effective implementation of planned measures and activities based on the ongoing analysis and upgrade of reform measures and the coordination of monetary, fiscal and structural policies, the HGK said in a statement on Friday.

It said that structural reforms should be strictly implemented in order to increase the potential rate of growth because the current growth projections did not ensure effective resolution of the debt issue and necessary strengthening of convergence processes, namely improving Croatia's position within the European Union.

The success of the Convergence Programme depends on the implementation of measures under the National Reform Programme and its implementation would ensure the fulfilment of the European Commission's recommendations concerning the pace of fiscal consolidation, the HGK said.

Reduction of the budget deficit and containment of public debt growth, along with improving the credit rating, might result in multiple beneficial effects, including lower borrowing costs for the government, companies and households and creating conditions for reducing the tax burden.

With the lowest budget deficit in the last eight years and containment of untenably high public debt by starting to reduce its share in GDP, the Convergence Programme indicates positive trends in public finances, the statement said.

The resolute implementation of the National Reform Programme and realisation of the Convergence Programme could finally open up the prospect of more dynamic and sustainable development of the country in the future, the HGK concluded.

The government on Thursday adopted the National Reform Programme, a document containing 60 reform measures divided into four main areas, which will be sent to the European Commission by the end of the month. The four areas are: macroeconomic stability and fiscal sustainability, facilitating doing business and improving the investment climate, public sector efficiency and transparency, and improving education for the labour market.

The government also adopted the Convergence Programme 2016-2019, with two key goals: to encourage economic growth and employment and halt public debt growth. The document constitutes a macrofiscal framework for the proposed reforms under the National Reform Programme, and projects that this year the economy will grow at a rate of 2% before slightly accelerating in the years ahead.

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