Presenting his cabinet's draft budget for 2014 and projections for budgets in 2015 and 2016 in the parliament, Prime Minister Zoran Milanovic on Wednesday vowed that Croatia's economy would be put on a sound footing in the next two or three years.
"For years, Croatia has lived beyond its means, and by the end of this year, the country's public debt will have reached HRK 195 billion, and servicing that debt is the biggest impediment to efforts to recover from the crisis as soon as possible," Milanovic told MPs.
Heavy credit pressure triggers new unfavourable borrowing to patch the budget gap, the premier said.
Projected budget revenues for 2014 are 113.1 billion kuna, and projected expenditures are 130.5 billion kuna, which means that the next year's deficit is put at HRK 17.5 billion.
This means that the budget deficit will rise by one billion kuna, reaching 5% of GDP, Milanovic recalled.
He pointed out the reduction of the public debt and budget deficit as prerequisites for a marked growth.
He outlined measures which his cabinet planned to take in order to ensure annual growth between 1.3% and 2.5% of GDP in the next three years.
Milanovic said that the government had to consolidate the public finances and take steps aimed at encouraging a sustainable economic growth.
He stressed that social benefits of the most vulnerable categories of the population, pensions to workers and viable rights of Homeland Defence War veterans and victims would not be retrenched.
Promising that the right to free-of-charge education will not be jeopardised, Milanovic announced a reform of primary and secondary schooling next year.
He outlined six main points of the government's engagement in efforts to recover the economy.
Those are public investments, removal of administrative barriers for direct investments, tax policy, direct grants to the private sector, access to EU funds, and well-organised and functioning economic diplomacy, according to the premier who called on parliamentary deputies to support the draft budget not only because of democratic procedure but also because of his assurances that that his cabinet is pursuing a responsible policy so as to make adjustments between needs and resources.
(Hina)
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