ZAGREB, Nov 19, 2020 – Prime Minister Andrej Plenkovic presented a draft 2021 state budget in parliament on Thursday, saying that it ensured economic recovery and continued to support citizens and the economy.
“The budget ensures Croatia’s economic recovery in the wake of the COVID-19 pandemic. The goal is, despite the fact that Croatia has suffered economic and financial consequences and Zagreb was struck by an earthquake, all of which has affected public finances, to continue to support citizens and the economy,” he said.
GDP projected to increase 5% in 2021
The prime minister mentioned the measures taken so far to maintain employment and economic activity, saying that HRK 8.1 billion will have been spent this year for job retention.
Various companies were exempt from partly or fully paying taxes and contributions, which cost HRK 5.3 billion, HRK 8.6 billion was set aside for healthcare, salaries, pensions, the jobless and the welfare system, and the tax burden was further reduced, he said.
“It’s good that, after more pessimistic forecasts, GDP is expected to drop 8%, which is less than we initially planned. We expect GDP to increase 5% next year, 3.4% in 2022 and 3.1% in 2023. The European Commission forecasts a 5.7% growth for Croatia next year, which is near the top in relation to other member states.”
Plenkovic said revenues in 2021 were planned at HRK 147.3 billion and expenditures at HRK 157.9 billion.
He announced that HRK 2.4 billion would be available to repair the damage caused by the earthquake in 2021 and HRK 4.2 billion in 2022, plus additional international sources he said the government would secure.
The prime minister said the government wanted to help those most in need, carer parents, persons with disabilities, ensure a national allowance for seniors and expand parental leave rights.
He said it was very important to keep the deficit at 3% in 2021 and announced that the public debt would be reduced in the years ahead.
“The goal is for the budget to protect the most vulnerable groups and to stimulate entrepreneurs and the economy,” he added.
Borrowing up to HRK 33.9 billion in total
Speaking of borrowing, Finance Minister Zdravko Maric said that under the law, borrowing on the domestic and foreign markets could total HRK 33.9 billion.
Maric said a US$ 1.5 billion bond was due in March 2021 and a HRK 6 billion bond in July 2021.
Before the debate on the draft, Karolina Vidovic Kristo (Homeland Movement) and Tomislav Tomasevic (We Can!) said they were given too little time to prepare for an effective debate on such an important document.
The draft budget was tabled on October 30, early enough. I don’t recall a draft being tabled this early and if you haven’t managed to prepare for the debate in 19 days, you probably have some issues, said Speaker Gordan Jandrokovic.
Pedja Grbin (Social Democratic Party) asked if Croatia had a plan B, given that it relies to a large extent on EU revenues, and Poland and Hungary are announcing a veto on the EU budget. Anka Mrak Taritas (GLAS) warned about the same thing.
