Croatia's new government must make unpopular decisions on budget cuts, Croatian media said on Monday, quoting Fitch Ratings agency on the outcome of Croatia's parliamentary vote on Sunday.
We must wait for their budget proposal. On paper it seems that the new government's platform is going in the right direction because we clearly see that they want to limit the public debt to 60 percent of GDP and cut the budget deficit from six to three percent of GDP, Fitch Ratings assistant director Michele Napolitano said in a telephone interview with the news agency Bloomberg as quoted by Croatian media.
Fitch Ratings has set Croatia's real GDP growth rate in 2012 at 0.3 percent. The agency believes that budget revenues will grow at a slower pace and that the new government will have to cut spending, notably pensions, ministry budgets and salaries in the public sector.
Those are unpopular decisions, Napolitano said.
It is still too early to say how the new government will influence the country's credit rating, he said.
