Brussels, 12/12/2013 (Agence Europe) - The European Commission is recommending that Croatia should put an end to its excess public deficit by 2016 and announce measures by 30 April 2014 to deal with the problem.
Croatia's draft budget for 2014 was published earlier this month. It says that the public deficit will remain above 3% of GDP until 2016. According to the Commission's autumn economic forecasts, at current policy, the deficit will reach 5.4% in 2013 and 6.4% in 2014, while debt will exceed the 60% of GDP level in 2013. The Croatian authorities expect the public debt to rise from 55.5% of GDP in 2012 to 62% in 2014, and to continue to rise until 2016.
In order to reduce the deficit to below 3% of GDP, the following trajectory is recommended: 4.6% of GDP in 2014 (adjustment of 0.5% in structural terms), 3.5% in 2015 (adjustment of 0.9% in structural terms) and 2.7% in 2016 (0.7%). In a press release published on Tuesday 10 December, the Commission says: “This longer adjustment path will enable Croatia to pursue much-needed structural reforms in parallel with fiscal consolidation, addressing weak growth”. (MB/transl.fl)