Budget revision: Revenue to rise by HRK 3bn, expenses by HRK 9.4bn

Amendments to the state budget for 2021 envisage an increase in budget revenue of HRK 3 billion to HRK 150.3 billion, while expenses will increase by HRK 9.4 billion to HRK 167.4 billion, PM Andrej Plenković said at a government session on Wednesday.

The government will send the draft budget revision to the parliament today.

Budget revenue in 2021 was originally planned in the amount of HRK 147.3 million while expenses were originally set at HRK 157.9 billion.

The budget deficit is expected to total HRK 17.1 billion or 4.3% of GDP and the general government deficit, according to ESA 2010 methodology, will amount to HRK 15.3 billion or 3.8% of GDP.

The PM does not expect the deficit to jeopardise the planned dynamic of Croatia's accession to the euro area.

He noted that the main purpose of the budget revision was to cover the costs of the health system.

Plenković said that he expected the share of public debt in GDP to drop in 2021 by 2.2 percentage points compared to last year and to account for 86.6% of GDP.

He said that before the start of the coronavirus crisis, his government's policies were geared towards achieving macroeconomic stability by creating foundations for sustainable economic growth and stabilisation of public finances, which, he said, was recognised by credit rating agencies, and one of the results was Croatia's entry to the European Exchange Rate Mechanism II in July 2020.

In 2021, real GDP growth is expected to be at a rate of 5.2%, Plenković said.

Text: Hina