Croatia Public Finance Review : Restructuring Spending for Stability and Growth

World Bank

Croatia Public Finance Review : Restructuring Spending for Stability and Growth

Autores

Descripción

The Croatia poverty rate, as measured by the international line of moderate poverty at dollar 5 in public-private partnership (PPP) terms, is estimated at 2.8 percent for 2012. The share of the population at risk of poverty, based on a higher national and relative poverty line, also declined substantially prior to the 2008 global financial crisis, although has subsequently increased markedly. The global financial crisis, with the loss of credit, has exposed Croatia's macroeconomic vulnerabilities. This report shows that without addressing macroeconomic weaknesses, through sustained fiscal adjustment and institutional reforms, Croatia will not be able to reignite higher growth and benefit fully from European Union (EU) membership, and the quest for future prosperity may prove elusive. Similarly, without accelerating structural reforms, especially in the area of labor market, investment climate, and public sector efficiency, Croatia will face further stifled competitiveness and any prospects for recovery of growth and jobs. Focusing on the fiscal and public sector related deficiencies, this report systematically analyzes three interrelated issues to assist the Croatian government in informing public policy, strengthening macroeconomic stability, and laying the foundation for a robust recovery: first, it analyzes Croatia's major fiscal weaknesses, risks, and alternative fiscal scenarios, and on that basis, calculates the required fiscal adjustment needed over the medium term. Second, it analyzes the institutional weaknesses and requirements for the efficient use of EU funds in the coming years. Third, the report analyzes the structure of Croatia's public finances and provides a blueprint of the fiscal adjustment of around 5 percentage points of gross domestic product (GDP) over the medium term.

Palabras clave

ACCOUNTING, ADVERSE IMPACTS, AGRICULTURE, APPROPRIATIONS, ARREARS, BALANCE SHEET, BANKRUPTCIES, BASIS POINTS, BENEFICIARIES, BENEFICIARY, BONDS, BORROWING COSTS, BUDGETING, BUSINESS CLIMATE, BUSINESS ENVIRONMENT, CAPITAL GAIN, CAPITAL INFLOWS, CAPITAL INVESTMENTS, CDS, COMPETITION POLICIES, CONNECTIVITY, CONSOLIDATION PROCESS, CONTINGENT LIABILITIES, CONTINGENT LIABILITY, CONTRACTUAL RELATIONSHIPS, CREDIT AGENCIES, CURRENCY, DEBT, DEBT LEVELS, DEBT OVERHANG, DEBT REPAYMENT, DEBT STOCK, DEBTS, DECENTRALIZATION, DEFAULT RISK, DEMOGRAPHIC, DEVELOPMENT BANK, DIRECT PAYMENTS, DOMESTIC ECONOMY, DOMESTIC MARKET, ECONOMIC COOPERATION, ECONOMIC CRISIS, ECONOMIC GROWTH, ECONOMIC INTEGRATION, ECONOMIC RECOVERY, ECONOMIC SECTORS, ECONOMIC SITUATION, EXCHANGE RATE, EXPORT COMPETITIVENESS, EXPORTS, EXTERNAL BORROWING, EXTERNAL DEBT, EXTERNAL FINANCING, FINANCIAL CRISIS, FINANCIAL INTEGRATION, FINANCIAL MANAGEMENT, FINANCIAL MANAGEMENT SYSTEMS, FINANCIAL SUPPORT, FINANCING REQUIREMENTS, FISCAL CONSOLIDATION, FISCAL DECENTRALIZATION, FISCAL DEFICIT, FISCAL DEFICITS, FISCAL DISCIPLINE, FISCAL EFFORT, FISCAL MANAGEMENT, FISCAL PERFORMANCE, FISCAL PLANS, FISCAL POLICY, FIXED CAPITAL, FIXED INTEREST, FIXED INTEREST RATE, FOREIGN CURRENCY, FOREIGN INVESTORS, FRAUD, GDP, GDP DEFLATOR, GINI COEFFICIENT, GLOBAL ECONOMY, GOVERNANCE INDICATORS, GOVERNMENT DEBT, GOVERNMENT DEFICIT, GOVERNMENT EXPENDITURE, GOVERNMENT EXPENDITURES, GOVERNMENT FINANCES, GRANT FUNDING, GROSS DEBT, GROSS DOMESTIC PRODUCT, GROWTH POTENTIAL, GROWTH RATE, GROWTH RATES, HEALTH SPENDING, HOLDING, HOLDING COMPANIES, HOURLY WAGES, HOUSING, HUMAN RESOURCE, IMPLICIT INTEREST, INCOME INEQUALITY, INCOME TAX, INCOME TAXES, INDEXATION, INEFFICIENCY, INFLATION, INFORMATION SYSTEM, INSTITUTIONAL CAPACITY, INSTRUMENT, INSURANCE, INSURANCE PREMIUM, INTEREST EXPENDITURE, INTEREST EXPENDITURES, INTEREST INCOME, INTEREST PAYMENT, INTEREST PAYMENTS, INTEREST RATE, INTEREST RATES, INTERNATIONAL FINANCIAL INSTITUTIONS, INVESTMENT CLIMATE, LABOR MARKET, LABOR MARKETS, LIFE EXPECTANCY, LIVING STANDARDS, LOCAL CURRENCY, LOCAL GOVERNMENT, LOCAL GOVERNMENTS, LOCAL SPENDING, LONG-TERM COSTS, LONG-TERM FINANCE, MACROECONOMIC MANAGEMENT, MACROECONOMIC RISKS, MACROECONOMIC STABILITY, MACROECONOMIC VULNERABILITIES, MACROECONOMICS, MARKET ACCESS, MARKET EFFICIENCY, MARKET PERFORMANCE, MATURITY, MERGERS, NATIONAL GOVERNMENTS, NATIONAL INCOME, OUTPUT, OUTPUT GAP, OUTPUT LOSS, OUTSOURCING, PENSION, PENSION CONTRIBUTION, PENSION EXPENDITURES, PENSION REFORM, PENSION SYSTEM, PENSIONS, PER CAPITA INCOME, PERSONAL INCOME, PORTS, PRIVATE SECTOR, PROPERTY TAXES, PROVISIONS, PUBLIC, PUBLIC DEBT, PUBLIC ENTERPRISES, PUBLIC EXPENDITURES, PUBLIC FINANCE, PUBLIC FINANCES, PUBLIC FUNDS, PUBLIC INVESTMENT, PUBLIC INVESTMENTS, PUBLIC POLICY, PUBLIC PROCUREMENT, PUBLIC RESOURCES, PUBLIC REVENUES, PUBLIC SECTOR, PUBLIC SECTOR COMPENSATION, PUBLIC SECTOR EFFICIENCY, PUBLIC SECTOR MANAGEMENT, PUBLIC SECTOR PERFORMANCE, PUBLIC SPENDING, PUBLIC TELEVISION, RATES OF RETURN, REAL ESTATE, REAL EXCHANGE RATE, REAL INTEREST, REAL INTEREST RATE, RECESSION, REGULATORY FRAMEWORK, REPAYMENT, REPLACEMENT RATE, RETIREMENT AGE, RETURN, REVENUE SOURCES, RISK FACTORS, RISK MANAGEMENT, RISK MANAGEMENT SYSTEM, ROADS, RULE OF LAW, SAVINGS, SECURITIES, SHORT-TERM DEBT, SOCIAL COST, SOCIAL PROTECTION, SOCIAL WELFARE, SOLVENCY, SOVEREIGN BOND, SOVEREIGN BOND MARKETS, SOVEREIGN DEBT, SOVEREIGN RATINGS, STATE GUARANTEES, STOCK-FLOW ADJUSTMENT, STRUCTURAL PROBLEMS, SUBNATIONAL GOVERNMENTS, SUSTAINABILITY ANALYSIS, T-BILLS, TAX, TAX EXEMPTIONS, TAX REVENUE, TAX REVENUES, TAX SYSTEM, TAXATION, TRANSITION COUNTRIES, TRANSITION ECONOMIES, TRANSPARENCY, UNEMPLOYMENT, UNEMPLOYMENT RATE, VALUATIONS, VALUE ADDED, WAGE DIFFERENTIALS, WAGES, WITHDRAWAL