IMPLEMENTATION OF THE INTERTEMPORAL BUDGET CONSTRAINTS - THE CASE OF SUSTAINABILITY OF THE PUBLIC DEBT OF THE CITY OF ZAGREB

The purpose of this paper is to evaluate the mid-term sustainability of City of Zagreb's public debt and determine the budget capacity for financing of development projects. The results of sustainability analysis, based on the framework of intertemporal budget constraint, shows that City of Zagreb's public debt will probably increase in the future. Such expected developments suggest that there is a need for an improvement in the budget planning process with the main goal of achievement of balanced budget or primary surplus which was recognized as the main determinant of public debt stabilization, which is directly in the domain of the policy makers' activities.