Maric: Measures to buffer inflation must not hamper economic growth

NEWS 20.05.2022 15:08
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Source: N1

Finance Minister Zdravko Maric said on Friday that in addition to all the measure to buffer the impact of inflation, we must not neglect and need to maintain economic growth and do everything for that growth to be 3% this year and higher if possible.

Addressing the 25th Financial Market conference in Pula, Maric said that he cannot comment on the question of possibly freezing prices, recalling the package of measures to ease inflationary pressure on citizens’ standards, saying that it would be adapted.

The minister added that there is a lot of uncertainty and it is difficult to forecast price trends, adding that the most vulnerable groups were the most threatened because the price of food and energy is the most prevalent in their shopping basket.

Asked what the monetary policy can do in the fight against inflation, Marić said that the measures until now were exclusively fiscal policy.

Asked if kuna currency appreciation would be worthwhile, Marić said there was room to maneuver in that regard but that is up to the Croatian National Bank (HNB).

The HNB’s main task is to maintain price stability and it should have something to say in these circumstances.

It is more than likely that this year will we have a higher inflation rate than the increase in wages, he said, adding that in the past few years wages increased faster than inflation.

Inflationary alarm already sounding

Asked about the inflation threshold that would signal a “red alert” to the government, Maric said the alarm  has already sounded. We have the highest inflation rate and we have already reacted. The measures will be adapted but it isn’t possible to completely remove the pressure.

He added that an additional 3.5 billion kuna has been allocated to repay the debt to drug wholesalers, however, that is not the solution because new debts are occurring. The healthcare system needs an overall overhaul.

He confirmed that a new international bond matures at the end of May and in July he plans to issue new domestic bonds.

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