Finance Minister says S&P report very positive

ZAGREB, March 19, 2022 – Finance Minister Zdravko on Saturday welcomed the confirmation of Croatia’s credit rating by rating agency Standard & Poor’s.

“In the current circumstances, this is very good news. The report is worded in a very positive way,” Marić told a press conference.

Standard & Poor’s on Friday confirmed Croatia’s credit rating at “BBB-/A-3” with a stable outlook, noting that the conflict in Ukraine could affect Croatia through weaker global demand, reduced tourism and inflation.

The agency expects the Croatian economy to grow at a steady pace over the next two years despite unfavorable inflation trends and the macroeconomic consequences of the war in Ukraine. The government should remain committed to its reform agenda, succeed in absorbing significant EU funding and gradually rebuild the fiscal space it lost as a result of the COVID-19 pandemic.

According to S&P, the Croatian economy is expected to grow at a rate of 3.7% in 2023 and 3.4% in 2024 and 2025. However, growth forecasts for this year have been revised down to 5.0% to 2.5% due to global geopolitical uncertainties. following the Russian military intervention in Ukraine and rising energy and commodity prices.

Marić said that over the next month the government will update official macroeconomic projections for 2022, including growth and inflation projections. S&P projected the inflation rate for this year at around 6%.

The downward revision of growth forecasts is also the consequence of last year’s growth, which was above all expectations, and uncertainties related to the direct and indirect effects of the Russian invasion of Ukraine , said the Minister of Finance.

As for inflation, he said that it should continue to accelerate in the first half of the year, while its evolution in the second half would depend on geopolitical developments and the evolution of energy prices and foodstuffs.

Entry into the euro zone is a positive risk

Marić said he was particularly pleased that S&P recognized the government’s efforts to improve the absorption of EU funding as well as its efforts regarding the EU’s Multiannual Financial Framework and the National Recovery and Resilience Plan.

He said that the implementation of the National Recovery and Resilience Plan was going very well, adding that everything planned under the plan had been achieved and that a further tranche of 700 million euros was expected. in June.

S&P said that despite the complex inflationary backdrop, Croatia is on track to enter the Eurozone by 2023 and that the government, in accordance with the provisions for the adoption of the euro, will reduce its budget deficit by below the Maastricht reference level of 3% of GDP in 2023-2025. .

Marić said joining the eurozone was a positive risk and would help raise the country’s credit rating. He said it was very important for the government to maintain its good reputation and confidence in international financial circles, even with regard to the preparation of an international bond issue, adding that the S&P report also contributed to the reputation of the government.

Marić revealed that he presented S&P with the government’s package of measures to mitigate the impact of inflationary pressures, worth nearly HRK 5 billion, including a reduction in VAT from 13% to 5, 0% for a wide range of food products, such as fresh meat, fish, fruit and vegetables.

Asked by the press whether he expected further retail price increases, he said it was difficult to predict, expressing hope that the VAT cut would mitigate further price increases. He noted that retail chains had started lowering prices even before April 1, when the government package came into force, adding that this was a good thing and indicated strong competition in the retail sector. retail.

Marić said he met with executives from the country’s 10 major retail chains. “They expressed their desire to be as responsive as possible, but noted that they were not the only link in the chain, as there are also suppliers.”

Commenting on media reports that people were increasingly buying certain items, such as cooking oil, Marić said that despite all the concerns, there was no need to stock up on food.

He said the government was also working on measures regarding the influx of Ukrainian refugees. They will receive both institutional and financial support, which will have some implications for fiscal policy, he added.

According to the latest data, more than 7,500 Ukrainians displaced by the war in their country have found refuge in Croatia.

Marić denies that the co-owner of the hotel group Jadranka booked him accommodation

Responding to questions from the press, Marić denied an article on the Net.hr news site according to which Krešimir Filipović, co-owner of the Jadranka group, had booked him accommodation for four days at the Bellevue hotel, owned by Jadranka, in 2019.

“It was the first time I met Mr. Filipović. I had no direct or indirect contact with him before, nor are we in regular contact today,” Marić said.

He said that all loans granted to this company by the Croatian Bank for Reconstruction and Development had been approved well before his tenure, adding that the company duly fulfilled all its obligations in this regard.

Net.hr wrote about Jadranka following a complaint by Arsen Mujagić, a civil society activist from Mali Lošinj on the northern Adriatic island of Lošinj, that one of the owners of Jadranka is a fund owned by Russian citizens who have been subject to EU sanctions.

Marić said the beneficial ownership register is public and all those who condemn Russian aggression against Ukraine agree that the application of sanctions is inevitable.

Earlier today, the Ministry of Finance said it was not true that there had been a change in ownership at Jadranka after the Net.hr report.

On August 18, 2020, Predrag Perenčević and Krešimir Filipović were entered into the register of beneficial owners as beneficial owners of Jadranka dd and there have been no changes since, the Ministry of Finance said in response to Net.hr.

The ministry said Marić did not stay in a luxury or presidential suite, pointing out that the minister himself booked the accommodation and paid for it.

Responding to the question about his ownership and whether Russians still held stakes in the company, Jadranka recently said that there was a change in ownership in 2014, when the company Beta Ulaganja, based in Zagreb, became the full owner of the Jadranka group.

“Croatian citizens Predrag Perenčević and Krešimir Filipović have always been the ultimate owners of the Jadranka group. Their financial assets and investments are managed by the investment and asset management company through Beta Ulaganja doo, as registered of the court and in the register of beneficial owners,” Jadranka said then.