Presidential advisor slams government's anti-inflation plan as 'tragicomic'

Velibor Mačkić, a special economic advisor to the Croatian president, sharply criticized the government's recently announced anti-inflation package. He dismissed it as a "budget rescue operation" and a blend of "panic and impression management," suggesting it could inadvertently worsen inflation.

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This is not an anti-inflation package. This is actually a budget rescue operation. This is, I would say, a combination of panic and of course, good old impression management.

Mačkić argued that the package's measures, particularly tax changes set to take effect next year, would likely cause businesses to pass on increased costs to consumers. He specifically pointed to higher taxes for small businesses and short-term rental providers, predicting these would translate into higher prices. "If you call this an anti-inflation package, I'll eat my diploma," Mačkić stated, comparing the situation to a football coach's famous quote.

He elaborated that the government's approach misunderstands basic economic principles, where policy changes inevitably alter behavior. Mačkić believes the tax hikes will lead some providers to increase their rates, creating a counter-effect that fuels inflation. He agreed with a journalist that this could increase the annual flat tax for some tourism accommodations, despite the government's earlier call to reduce tourism margins by 10-20 percent.

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If you call this an anti-inflation package, I'll remember a deceased football coach and say that if this reduces inflation, I will eat my diploma. It is literally tragicomic.

While acknowledging that Croatia's tourism sector might benefit from global geopolitical instability and its proximity to key markets, Mačkić stressed the need for caution. He noted that Croatia's tourism structure relies heavily on smaller providers, not large hotel chains. Therefore, any price increases could impact both domestic and international tourists. He concluded by emphasizing tourism's vital role in Croatia's economy, urging careful consideration in its management.

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If this is done, and you call it an anti-inflation package, then I will remember a deceased football coach and say that if this reduces inflation, I will eat my diploma. It is literally tragicomic.