ZAGREB – Deep recession

The government has prepared a package of temporary measures potentially reaching almost 8% of GDP, intended to mitigate the negative impact of the COVID-19 crisis on the economy.

On Thursday, the government redistributed extra budget funds worth HRK 2.1 billion (€280 million) and most of those funds will be used for the government’s measure to help employers retain their workers.  Some 53 million kuna will be set aside to fund the procurement of new equipment for microbiological diagnosis of the coronavirus.

Finance Minister Zdravko Maric said that decreasing budget revenues would force the authorities to borrow, which would consequently lead to a rise in Croatia’s public debt, reports state news agency HINA.  But Croatia is set for a “deep recession,” the World Bank warned in its spring outlook on Thursday, due to the adverse developments at the beginning of 2020. Read more.

However, the minister hoped that Croatia could soon make a positive turnaround. As the World Bank pointed out, “the crisis can provide an opportunity to revisit Croatia’s growth model and focus on policies to Increase resilience to exogenous shocks and raise the economy’s growth potential”. (Tea Trubić Macan, EURACTIV.hr)

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