04-08-2011 16:39 Croatia
Institute of Public Finance criticises government's fiscal policy guidelines
Public Institute of Finances (IJF) has called the recent government guidelines on economic and fiscal policy as based on "too optimistic assumptions" that offer "unconvincing projections."
In its critique the institute’s Katarina Ott said the guidelines mentioned the government’s Economic Recovery Programme established a year ago, but "skillfully avoid" detailing its effects so far.
Ott warns that numerous concrete tables that were part of previous guidelines are missing from the current proposal.
Amongst other things, IJF critique says that the government's guidelines predicted a GDP growth of 1.5 per cent this year, 2.5 the following, 3.5 in 2013 and four per cent in 2014. European Comission on the other hand, predicts a growth rate of 1.1 per cent this year and two in 2012, while IMF has predicted between one and 1.8 per cent.
IJF says that guidelines hope for "salvation" from EU and EU membership, but it warns that the EU's is uncertain and the benefits of membership could be felt only in the long run and if Croatia herself "makes an effort."
That is why the readers of the guidelines should focus less on offered projections and more on necessary structural reforms that are necessary as Croatia lags further behind in growth, with a negative difference in reality and a potential GDP increase, IJF warns.
Source: Croatian Times