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Photograph: HINA/ Lana SLIVAR DOMINIĆ/ lsd

Croatian Democratic Union (HDZ) leader and Prime Minister-designate hopeful, Andrej Plenkovic, said on Friday that the government's economic policy in 2017 would focus on laying sound foundations for the national economy so that by the end of the government's term in 2020, 5% economic growth, a 68% employment rate and demographic revival were achieved.

Plenkovic outlined the government's economic policy at a conference organised by the Lider business magazine.

"Our goal is to lay sound foundations for the national economy, and our efforts will be directed towards implementing measures that will lead to economic growth and development, job creation, greater social equity and demographic revival, including putting an end to the emigration of young people. Current external factors are favourable and impact economic trends, but we must be aware that it is necessary to have a well thought-out economic policy that will use such favourable circumstances for economic growth," said Plenkovic.

He said that by 2020 the following goals should be achieved: a 5% economic growth rate, a 68% employment rate, demographic revival social equity, a well organised system of social benefits and pensions, and an environment encouraging the creativity, competence and skills of every individual.

Plenkovic said that the measures whereby those goals would be achieved would be implemented by competent ministers who had proven themselves in their respective fields of work, in line with five pillars of the government's economic platform.

He said the first pillar was a thorough tax system reform aimed at making the system simpler and reducing the tax burden on businesses and taxpayers so as to eventually restore investors' trust. The reform also includes the activation of state-owned property for economic purposes and a thorough restructuring of public companies.

The second pillar is investment in growth generators, Plenkovic said, identifying agriculture, tourism and the industrial sector as generators of growth.

The third pillar is enhancing the efficiency of state institutions, which includes digitalisation, introduction of e-administration and better coordination between bodies of public administration, he said, adding that the fourth pillar was the sustainability of public finance and the fifth a reform of the education system.

"We will continue reducing the budget deficit and the share of public debt in GDP by carefully combining fiscal consolidation and growth. The budget for next year will be based on that principle. In that context, we will also continue our dialogue with the EC and continue defining good national reform and convergence programmes. We plan to reduce the deficit, achieve macroeconomic stability, strengthen competitiveness and create new jobs," Plenkovic said.

He added that in 2017 the government would focus on the expenditure side of the budget and that the general government budget deficit should be cut to 2% of GDP next year, which would contribute to reducing the share of public debt in GDP.

"Croatia now pays 12 billion kuna in interest on public debt... The public debt in the former government's term from 2011 to 2015 grew by 73 billion kuna, reaching 86.7% of GDP. That is an unsustainable growth dynamic and a source of vulnerability of the economy," he said.

Improving the country's credit rating and reducing interest on the debt is a key priority, he said.

Croatian Employers' Association (HUP) president Gordana Deranja said she expected the new government to make "decisive and fast moves."

"The current economic momentum should be used right now, and changes that will make the current economic growth sustainable should be launched without delay... a 2-3% growth rate is good but is not enough," she said, adding that the country needed at least 4-5% growth.

This, she said, requires serious reform steps and the restructuring of the public sector.

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