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In anticipation of new Government

14.10.2016 13:58:00 | Autor/Izvor RBA analitičari, Croatia

The week was actually dominated by politics. As we expected, HDZ leader Mr. Plenkovic was named PM designate after he collected 91 signatures from supportive MPs (out of 151). The first session of the new Parliament is scheduled for today, and during the week ahead we expect the new Croatian government will be formed and start working effectively on much-needed structural reforms. A stable majority paired with improved macroeconomic indicators certainly represents a favourable starting position in terms of continuing with fiscal consolidation and structural changes, which could be carried out more efficiently under an expanding business cycle. In this context we expect the upcoming EDP report will confirm a better than initially expected fiscal outcome in H1 2016, strongly influenced by favourable tourism results, but also by the fact that the technical government was limited in terms of raising budget spending, said in CEE Weekly.

Amidst an environment of negative inflation rates (which was confirmed by recent PPI and CPI releases) the positive impact on consumption could continue by alleviating the burden on personal income, thus exerting a positive impact on GDP as well. However, in order to achieve sustainable economic growth, a stable government must play a crucial role in the long run by emphasising reforms and meeting the needs of the private sector.

Other news:
11.10.2016 HDZ leader Plenkovic named as PM designate
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10.10.2016 New contract for ĐĐ Holding
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10.10.2016 Closer to a Stable Government
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10.10.2016 Closer to a Stable Government (HRK and rates positive)
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7.10.2016 Excellent tourist season
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6.10.2016 Merger of RZB and RBI has been resolved in principle
5.10.2016 Favourable retail trade outcome in August
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4.10.2016 Q2 Current Account Surplus confirmed
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3.10.2016 Surge of equity indices slowed down
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3.10.2016 Q2 Current Account Surplus confi rmed
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