In a rare Saturday session, Parliament starts debate on the budget for the next year.
On Saturday morning, Prime Minister Andrej Plenković presented to Parliament the 2017 state budget, noting that it represented an important step forward in achieving social solidarity while strengthening fiscal stability and sustainability, reports Večernji List on December 10, 2016.
“The proposed budget includes the realization of important political goals that I presented in the programme of activities of my government, while respecting objective macroeconomic constraints which we must take into account when conducting the macroeconomic policy”, the Prime Minister said. He explained that this meant that the total budget deficit would be kept below three percent of GDP. In fact, it is planned that the deficit will be as low as 1.9 percent of GDP.
He explained that such budgetary proposal will make it possible to continue with the decline in the public debt to GDP ratio and strengthen the arguments for exiting the excessive budget deficit procedure, and at the same time bring about an improvement in Croatia’s credit rating.
“On the other hand, the budget provides for a tax relief and a defined structure of expenditures which shows that the government is determined to implement social and political goals, especially in the area of demographic renewal, but also to respect the rights of public sector employees, for whom the funds for salary increase are provided for the first time since 2009”, said Plenković.
The Prime Minister pointed out that the government had taken care to protect the rights and dignity of Croatian war veterans. “At the same time, this budget represents a significant step forward in achieving social solidarity, while strengthening fiscal stability and sustainability”, said Plenković.
In the budget proposal, the revenues are planned at the level of 121.6 billion kuna, expenditures of 128.4 billion kuna, with a deficit of 6.8 billion kuna, or 1.9 percent of GDP. The proposed budget is based on the projection of economic growth of 3.2 percent in 2017. Under the proposed budget, total government expenditures will be 5.48 percent or 6.7 billion kuna higher than in 2016.
Almost all ministries will get more money than in 2016, with largest increases being allocated to Ministry of State Property, Ministry of Environmental Protection and Energy, and Ministry of Defence.
Opposition parties and some economist have criticized the government, saying that its forecast of GDP growth in 2017 was too optimistic, and that budget revenues might not reach the expected levels. Also, the final numbers adopted by the government and sent to Parliament were higher by about 2 billion kuna in both planned revenues and expenditures, compared to what was forecast in government’s budgetary projections adopted just two weeks ago. The government explained the difference saying that amount of money received from EU funds would be substantially higher than initially expected.