Croatia’s Deficit Again Smaller than Expected

Total Croatia News

Finance Minister Marić is in Washington for meetings with IMF and the World Bank.

Finance Minister Zdravko Marić met a Saturday with representatives of international financial institutions in Washington and reported that Croatia would have a smaller budget deficit than expected for the second year in a row, reports on October 15, 2017.

The Croatian delegation, led by Finance Minister Zdravko Marić, includes representatives of the Finance Ministry and the Croatian National Bank (HNB) and is in Washington to attend meetings of the World Bank and the International Monetary Fund (IMF).

“The talks were very positive, primarily from the perspective that the Croatian economy continues this year with good trends and economic growth. I have informed them that, for the second year in a row, the results of Croatian public finances are better than expected,” said Marić.

He pointed out that the government in mid-September adopted a report on the execution of the state budget in the first six months of the year, according to which the general government surplus amounted to 35 million kunas. “All revenues are being realized in accordance with the plan, and some of them, notably income tax and partly VAT, are also slightly above expectations,” said the Finance Minister, adding that by the end of October we should have the final figures for the budget for the first nine months.

“I would not like to announce any specific figures at this time, because we still have two and a half months ahead of us, but it is certain that, just like in 2016, we have made efforts not only to execute the budget as planned but even better than that, which is an excellent message to local and international investment community,” Marić said.

The planned budget deficit for 2017 amounts to 6.8 billion kunas or 1.9 percent of GDP. When extrabudgetary funds are added, the general government deficit should amount to 1.6 percent of GDP, or 5.6 billion kunas.

As for 2016, the general government deficit was 0.8 percent of GDP, which was a reason why Croatia was able to leave the EU’s excessive deficit procedure.

According to Marić’s, the 2018 budget proposal will be ready for the government’s procedure in November and will then be forwarded to the parliament in accordance with legal deadlines. “The next week, the IMF’s regular mission will arrive in Croatia so that we will discuss our plans and projections for the next year,” Marić announced, adding that the budget and fiscal and economic guidelines were issued in July.

According to the guidelines, the state budget revenues for 2018 are planned at the level of 127.9 billion kunas and expenditures at 132.9 billion kunas, while the general government deficit is projected at the level of 0.8 percent of GDP, with the GDP growth rate of 2.8 percent.

In addition to the macroeconomic topics, Marić discussed current and future projects with the World Bank. “Croatia is very interested in the project of financial and business restructuring of Croatian Motorways and Croatian Roads public companies,” said Marić, adding that activities on this project were expected by the government in the fourth quarter of this year. “For now, things are going according to the plan. We are very active in this field. We have managed to settle the majority of obligations of the state budget in the first half of the year, and we have freed up space so that we can now focus just on the segment of motorways and roads. We must make a step forward to set it on a fiscally viable basis. There will be more information in the next few weeks, and we will inform the public promptly about all our activities,” concluded Marić.

The debts of the road sector – Croatian Motorways, Croatian Roads and Highway Rijeka-Zagreb public companies – reach 5.2 billion euros, and about a billion euros should be repaid by the end of this year.

Translated from


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