Budget gap to narrow to 0.8% in 2018, surplus envisaged in 2020

The Croatian 2018 budget's revenue side stands at HRK 127.9 billion, and the expenditures are projected at HRK 132.9 billion, as a result of which the general government deficit will be 0.8% of the country's GDP, according to guidelines for economic and fiscal policies for 2018-2020 period, endorsed by the government on Thursday.

Outlining the guidelines, Finance Minister Zdravko Maric said that the economic indicators in 2016 and in the first half of 2017 "show that we are on the right track, and this has been recognised by international and local institutions".

Our responsible fiscal policy has pushed Croatia out of the (EU) Excessive Deficit Procedure. In addition, for the first time since 2017, Croatia's economic outlook has been assessed (by credit ratings agencies) as positive, Maric recalled.

Maric said that the government kept its projection of the economic growth unchanged at 3.2% in 2017, however, it revised it downward to 2.8% for 2018.

The projected budget revenues for 2018 are expected to rise by 5.3% compared to 2017. Furthermore, the budget revenues for 2019 are projected to rise by 3.6% to HRK 132.6 billion, and by 3.1% to 136.7 billion kuna in 2020.

In 2018, the budget gap is expected to be 0.8% of GDP, and in 2019 it will further narrow to 0.3% of GDP, whereas in 2020 a budget surplus is expected, according to Maric's explanation.

The public debt is projected to decrease to 81.1% of GDP by the end of 2017, which will be lower by 2.6 percentage points compared to the public debt in 2016.

The public debt to GDP ratio is envisaged at 72.1% by the end of 2020.

Text: Hina

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