PM Plenkovic: Croatia moving in the right direction, as shown by growth

Croatian Prime Minister Andrej Plenkovic said on Wednesday that the government was very satisfied with figures showing a 2.9% increase in GDP in the third quarter of this year because it showed that Croatia was moving in the right direction, which, he said, was partly a result of the previous government's work and sent out a message of political stability.

"This is a very clear signal of economic growth, the best in the last eight years. The government is very satisfied with such indicators. They prove that Croatia is moving in the right direction. We are especially satisfied that the growth trends have continued in all industries, we can see it particularly in tourism and export. Such a signal gives rise to additional optimism as we continue to create a stimulating and simple business environment with the aim of achieving even higher growth rates," Plenkovic told a news conference at the government offices.

He recalled that the government had projected a GDP growth rate of 3.2% in 2017, and a likely further increase.

Plenkovic said the latest economic trends were owing to active measures from the 2016 National Reform Programme and that they contributed to a decrease in the budget deficit, facilitated the meeting of EU recommendations related to the exit from the Excessive Deficit Procedure and the removal of macroeconomic imbalances.

The good economic indicators, higher exports and GDP and the lower deficit have improved Croatia's ranking in the global competitiveness lists for 2016 and 2017, he stressed.

"We can say that this is owing also to the work of the previous (HDZ-Bridge) government, but since the period in question is from 1 July to 30 September, we can also say that these results are as good as they are because of an important message of political stability that had an effect both before and after the (11 September) parliamentary elections," Plenkovic said.

The government will continue with activities aimed at facilitating business operations, reducing parafiscal levies, and implementing other economic policy measures from its programme, and those activities will reflect on employment and the standard of living in the country, Plenkovic said.

He is hopeful that economic growth will pick up to 5% by 2020.

The national statistical office (DZS) earlier in the day published the preliminary forecasts regarding GDP in Q3 2016, according to which GDP was 2.9% higher on the year. Q3 was the eighth quarter to see a GDP rise.

This is in line with expectations of eight analysts interviewed by Hina who had estimated that in that quarter the economy would grow 2.9% on the year on average, their estimates ranging from 2.5 to 3.3%.

The 2.9% growth is the fastest growth since Q2 2008, the year before the recession.

That economic growth is due to stronger exports of services, mostly tourist services.

The contribution of domestic demand was positive.

The contribution of the net foreign demand was also positive by 1.4 percentage points.

State consumption was up 2.1%, gross investment in fixed capital increased by 2.9%, while household consumption soared 3%.

According to seasonally-adjusted data, GDP in Q3 2016 was up 1.7% on the previous quarter, and it rose 2.7% on the year.

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