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PM says Croatian economy going in right direction

07.09.2017  10:29
Source: HINA
Prime Minister Andrej Plenkovic said that the 2.8% annual economic growth in the second quarter of the year confirmed that the Croatian economy was going in the right direction, also owing to the positive impact of last year's tax reform.

Speaking at a cabinet session, he said it was very positive news that GDP had increased for the 11th consecutive quarter and that in Q2 it had increased 0.8% from Q1, when the quarterly increase was 0.6% .

Plenkovic highlighted that Croatia's GDP growth in Q2 was higher than the European Union average. In Q2 2017, according to seasonally adjusted data, the EU economy increased 0.6% quarterly and 2.3% annually, whereas the Croatian economy increased 0.8% and 3.4% respectively.

"That puts us in the group of EU countries with the highest growth rates," he said, adding that this confirmed that the Croatian economy was going in the right direction. He said the adoption of the law on crisis management in companies of systemic importance had limited the impact of the crisis in the Agrokor group on the national economy, as evidenced by the summer season. "That should be put within the context of the best tourist season," he said, expecting nights to reach 100 million. He reiterated that the finance minister and the tax authority had been tasked with once again thoroughly explaining the property tax to see if any modification was necessary. "If it's estimated that we are not ready to impose that tax, we will delay it. We wish to find a solution that will also be in the spirit of equity because that was one of the main aspects of the whole tax reform."

Plenkovic said this would not be a value tax on property such as many EU member states have but an attempt to change, through equity principles, the current local rate, the monument annuity and the holiday house tax. "We will thoroughly discuss this issue and submit a motion to parliament after once again explaining to the public in detail all the effects," he said, adding that the money collected from property tax would belong to the local and not the central government.

As for the government's decision to raise the fee for renewables from HRK 0.035 to HRK 0.105 per kWh as of September, Plenkovic said the fee had not been raised for four years and that the rise was "a continuation of our policy to have as much renewables as possible as the source of electricity in Croatia," in keeping with global trends. He said the monthly electricity bill would go up HRK 20 "but, given the tax reform, it will remain lower than at the same time last year."
Plenkovic voiced hope that by mid-2019 the government would find a way, in talks with companies in the business of renewables, to increase the revenues of the Croatian Energy Market Operator, which pays out the fee for renewables.

(EUR 1 = HRK 7.4)