State Budget in Best Shape in Last 15 Years

Total Croatia News

The deficit in the first six months of the year was just 0.4 percent of the GDP.

Finance Minister Zdravko Marić said on Thursday that the budget deficit for the first half of the year was 1.6 billion kunas, or 0.4 percent of projected GDP, while at the level of the general government, which includes the budget, extra-budgetary funds and local self-government units, the results were the best in the last 15 years – there was a surplus of 35 million kunas, reports Večernji List on September 14, 2017.

These results, he noted, are a strong message on public finances, which has been recognised by the international community. For the first time since 2007, Croatia has received a neutral outlook for its credit rating. Financial markets have also recognised this; in the first half of the year, the government issued two bonds with the lowest interest ever.

Presenting a report on the execution of the state budget for the first half of this year, the Finance Minister said that budget revenues amounted to 58.3 billion kunas, up 3.5 percent from the same period last year.

Tax revenues increased by 2.4 percent to 35.1 billion kunas. Income tax revenues amounted to 1.1 billion kunas, which was 8.3 percent less than last year. However, that is still above the plan and is mainly the result of the tax reform whose primary goal was to reduce the tax burden from income and corporate taxation. Revenues from corporate taxes increased by 16.5 percent to 4.9 billion kunas, and VAT revenues grew by 4.6 percent to 21.4 billion kunas, which is also the result of the tax reform, Marić said.

Total government expenditures in the first half of the year amounted to 59.9 billion kunas and were about two percent higher than last year. Expenses for employees during this period amounted to 12.9 billion kunas, which was an increase by 336 million kunas, due to the agreement with the unions and the government’s decision to increase the salaries of employees in the public sector by two percent from February. Material costs grew by 196 million kunas to 5.3 billion kunas, mainly due to the payment of debts of the healthcare system. Financial expenses fell by 226 million kunas to 5.2 billion kunas, largely due to lower interest on government debt.

In the first six months, the state budget achieved a deficit of 1.6 billion kunas, or 0.4 percent of projected GDP, which was a better result than in the previous year by 800 million kunas. When extra-budgetary funds and local self-government units are included, there has been an unprecedented result for the past 15 years – the general government had a surplus of 35 million kunas, the Finance Minister said.

Stressing that “we can expect to end this year even better than we have planned,” Marić said that the public debt share at the end of this year would be 81.1 percent of GDP, which would be 2.5 percentage points less than at the end of 2016.

Translated Večernji List.


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