Croatia expects growth rate of 2.9 pct in 2018: gov’t

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The Croatian government proposed a new budget for 2018 on Thursday, with the growth rate projected at 2.9 percent.

“Our framework is determined by the fact that a six-year recession is over and based on growth, exports of goods and services, personal consumption, investments, and better absorption of European funds,” Prime Minister Andrej Plenkovic said at the beginning of the government session.

The proposed budget forecasts revenues of 129 billion kune (19.96 billion U.S. dollars), which is 6.1 percent more than the current budget, while expenditures are projected to be 133.3 billion kune, an increase of five billion kune.

The prime minister said he expects the budget to be balanced in 2019, and in 2020, to have a surplus of 0.8 percent of gross domestic product (GDP). The general government deficit in 2018 is expected to be at 0.9 percent of GDP.

“In 2018, our ambition is that a share of public debt to GDP is 76.6 percent; in 2019, 73.4 percent; and in 2020, 69.5 percent of GDP. These are the frameworks of our responsible policy of fiscal discipline, sustainability and a very rational approach to public finances,” Plenkovic said.

The budget has been increased for most ministries, the most for economy departments and environmental protection. The budget has been reduced for the ministries of finance, interior, and justice. The defense ministry’s budget is to grow by almost ten percent.

Finance minister Zdravko Maric also presented on Thursday a draft budget revision for this year, under which total budget revenues will amount to 122.45 billion kune, while expenditures will be reduced by 1.6 billion kune to 126.8 billion.

Under the draft budget revision, most money — 1.1 billion kune — will be directed to the health ministry, and most will be used for the payment of state and county hospitals’ due debts.

Economy minister Martina Dalic said the most important feature of both the budget revision for 2017 and the draft budget for 2018 was “that they continue on a steady path to reducing the deficit, thus contributing to the reduction of public debt and indebtedness, which is one of the government’s most important strategic and economic goals.” (1 U.S. dollar = 6.5 Croatian kune)

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