Croatia - Restructuring Public            Finance to Sustain Growth and Improve Public Services : A            Public Finance Review

World Bank

Croatia - Restructuring Public Finance to Sustain Growth and Improve Public Services : A Public Finance Review

Autores

Descripción

The year 2000 was a turning point in Croatian history, marked by closing the chapter of the war and the first phase of transition. With that, the country turned its attention to the "second transition,"the principle goal of which is to place Croatia on a path to the European Union (EU). While opening the economy to global markets through World Trade Organization (WTO) and CEFTA memberships and reestablishing cooperation with its Southeast European neighbors, the signing of the Stabilization and Association Agreement (SAA) marked the first firm milestone on Croatia's path to EU. In October 2005, Croatia opened EU accession negotiations, with the screening phase concluded a year after. Benefiting from successful economic transformation and the EU accession negotiations, growth has remained solid, and is roughly on par with the average for the European transition countries. Inflation has been modest despite higher prices for imported oil, and has been kept in check partly due to exchange rate appreciation. In fact, the central bank has intervened to prevent stronger appreciation in the face of robust capital inflows. However, the oil and commodity price increases and the aggregate demand pressures have contributed to a widening of the current account deficit in 2005-2007, despite somewhat tighter fiscal policy. Building on this foundation, the Government has an unparalleled opportunity to place Croatia on a sustainable growth path to achieve better living standards for all and to integrate into EU. To seize this opportunity, Croatia needs to sustain macroeconomic stability and continue creating a better climate for investment. In this context, key priorities for the public sector will include: reducing the size of the state and the fiscal deficit, and thereby helping to increase private sector productivity and competitiveness; and improving public sector efficiency and effectiveness. This report will suggest ways in which these twin priorities may best be addressed.

Palabras clave

ACCESS TO CAPITAL, ADMINISTRATIVE COST, AGGREGATE DEMAND, AMORTIZATION, ARREARS, ASSESSMENT PROCESSES, AVERAGE EXCHANGE RATE, AVERAGE GROWTH, AVERAGE WAGES, BALANCED BUDGET, BANK DEPOSITS, BANKRUPTCIES, BANKS, BASIC PENSION, BENEFICIARIES, BORROWING, BORROWING REQUIREMENTS, BUDGET CONSTRAINT, BUDGET PLANNING, BUDGETING, BUSINESS CYCLE, BUSINESS PLAN, CALCULATIONS, CAPITAL INFLOWS, CENTRAL BANK, CENTRAL BANKS, CLAIMANTS, COMMODITIES, COMMODITY, COMMODITY PRICE, CONSUMER, CONSUMER PRICE INDEX, CONTRIBUTION RATE, CONTRIBUTION RATES, CONTRIBUTIONS, COST BENEFIT ANALYSIS, COST ESTIMATES, CREDIT EXPANSION, CREDIT GROWTH, CROWDING OUT, CURRENT ACCOUNT, CURRENT ACCOUNT DEFICIT, CURRENT PENSION, CURRICULUM, DEBT, DEBT FINANCING, DEBT REPAYMENT, DEBT SERVICE, DECENTRALIZATION, DEFICIT FINANCING, DEFICITS, DEPOSITS, DIRECT COSTS, DISABILITY, DOMESTIC BANKS, DOMESTIC BORROWING, DOMESTIC CREDIT, DOMESTIC DEBT, EARLY RETIREMENT, EARNINGS, ECONOMIC ACTIVITY, ECONOMIC EFFICIENCY, ECONOMIC GROWTH, ECONOMIC MANAGEMENT, EDUCATIONAL SERVICE, ENVIRONMENTAL, ENVIRONMENTAL TAXES, EQUITY ISSUES, EXCHANGE RATE, EXPENDITURE RESTRAINT, EXTERNAL DEBT, EXTERNAL INDEBTEDNESS, EXTERNAL SHOCKS, FINANCES, FINANCIAL PERFORMANCE, FINANCIAL SECTOR, FINANCIAL SHOCK, FINANCIAL SUPPORT, FISCAL CONSTRAINTS, FISCAL DEFICIT, FISCAL DISCIPLINE, FISCAL POLICY, FISCAL POSITION, FISCAL SUSTAINABILITY, FIXED EXCHANGE RATE, FOREIGN CURRENCIES, FOREIGN CURRENCY, FOREIGN EXCHANGE, FOREIGN EXCHANGE RESERVES, FUND MANAGEMENT, GLOBAL MARKETS, GOVERNMENT BORROWING, GOVERNMENT BUDGETS, GOVERNMENT DEBT, GOVERNMENT DEFICIT, GOVERNMENT EXPENDITURE, GOVERNMENT EXPENDITURES, GOVERNMENT INFORMATION, GOVERNMENT REVENUES, GOVERNMENT SAVINGS, GOVERNMENT SPENDING, GOVERNMENT SUBSIDIES, GRANT FUNDING, HEALTH INSURANCE, HEALTH INSURANCE FUND, HEALTH SPENDING, HOUSEHOLD EXPENDITURE, HOUSEHOLD EXPENDITURES, HOUSEHOLD INCOME, HUMAN RESOURCE, INCOME, INCOME GROUPS, INCOME INEQUALITY, INCOME LEVELS, INCOMES, INCREASE IN INCOME, INDEBTEDNESS, INDIVIDUAL ACCOUNT, INFLATION, INFORMATION SYSTEM, INFORMATION SYSTEMS, INSTRUMENT, INSURANCE SCHEMES, INTEREST PAYMENTS, INTEREST RATE, INTEREST RATE POLICY, INTEREST RATES, INTERNATIONAL STANDARDS, INVESTMENT FINANCING, LABOR COSTS, LABOR FORCE, LABOR MARKET, LABOR PRODUCTIVITY, LIFE EXPECTANCY, LIQUIDITY, LIQUIDITY POSITION, LITERACY, LIVING STANDARDS, LOCAL GOVERNMENT, LOCAL GOVERNMENTS, MACROECONOMIC STABILITY, MANDATORY PENSION FUNDS, MARKET COMPETITION, MARKET FAILURES, MINIMUM PENSION, MONETARY POLICY, NATIONAL BANK, NATIONAL CURRICULUM, OIL, OIL PRICES, OPEN ECONOMY, PENSION, PENSION BASE, PENSION BENEFITS, PENSION CONTRIBUTION, PENSION FUNDS, PENSION POLICY, PENSION REFORM, PENSION SYSTEM, PENSIONERS, PENSIONS, POLLUTION, PRICE INDEX, PRICE INDEXATION, PRIMARY EDUCATION, PRIVATE SECTOR INVESTMENT, PRODUCTIVITY, PUBLIC DEBT, PUBLIC EXPENDITURE, PUBLIC EXPENDITURES, PUBLIC FINANCE, PUBLIC FINANCES, PUBLIC GOODS, PUBLIC INVESTMENT, PUBLIC SPENDING, PUBLIC-PRIVATE PARTNERSHIP, REAL ESTATE, REAL EXCHANGE RATE, RECURRENT EXPENDITURES, RELATED COSTS, RENTS, REPLACEMENT RATE, REPLACEMENT RATES, RESERVES, RESOURCE MANAGEMENT, RESPONSIBILITIES, RETIREMENT, RETIREMENT AGE, RETURN, RETURN ON ASSETS, RETURNS, REVENUE ENHANCEMENT, SAFETY NET, SAFETY NETS, SALARIES, SALARY, SAVINGS, SCHOLARSHIP, SCHOLARSHIPS, SECONDARY EDUCATION, SECONDARY SCHOOL, SENIOR, SHAREHOLDER, SHORT-TERM EXTERNAL DEBT, SICK LEAVES, SOCIAL ASSISTANCE, SOCIAL PROTECTION, SOCIAL SECURITY, SOCIAL WELFARE, SUSTAINABLE GROWTH, TAX, TAX EXEMPTIONS, TAX RATES, TAX SYSTEM, TAXATION, TECHNICAL EDUCATION, TERM CONTRACTS, TRANSITION COUNTRIES, TRANSITIONAL ARRANGEMENTS, TRANSPARENCY, UNEMPLOYMENT, UNEMPLOYMENT BENEFITS, WAGE, WAGE GROWTH, WAGE RATES, WASTE MANAGEMENT, WELFARE BENEFIT, WORLD TRADE, WORTH