Naslov
The financial furmoil in central and eastern Europe and fiscal policy in Croatia

Autori
Mihaljek, Dubravko

Izvornik
Newsletter (Institute of Public Finance) (1333-4417) 11 (2009), 40; 1-14

Vrsta, podvrsta i kategorija rada
Radovi u časopisima, popularan rad, ostalo

Ključne riječi
fiscal policy

Sažetak
Central and eastern Europe (CEE) is the emerging market region hardest hit by the spillovers of the financial crisis from the advanced economies so far. It has been affected so hard because it had financed its long expansion to a great extent by foreign borrowing, and many countries, including Croatia, had accumulated large external and internal imbalances in the process. As external sources of funding began to evaporate in the second half of 2008, it was only a question of time before private consumption and investment in the region would start to adjust. The adjustment accelerated in late 2008 and early 2009 as western European countries fell deeper into recession and sharply reduced their demand for imports from CEE. The public sector in many CEE countries largely ignored these events for several months, but eventually started to adjust as well. In particular, the public sector in Croatia postponed adjustment until the spring of 2008, unnecessarily bringing into question the maintenance of macroeconomic and financial stability. While some initial steps have been taken to remedy the situation, it remains to be seen how the revised budget for 2009 will be implemented and how the resulting deficit will be financed in a very difficult global financial environment.

Izvorni jezik
Engleski

Znanstvena područja
Ekonomija

POVEZANOST RADA