17:17 / 03.10.2025.

Author: Domagoj Ferenčić

Government's budget revision foresees a budget deficit of 2.9%

Deputy Prime Minister and Finance Minister Marko Primorac
Deputy Prime Minister and Finance Minister Marko Primorac
Foto: Josip Regovic / PIXSELL

At Friday’s cabinet session government adopted the budget revision for 2025. The revision foresees an increase in revenues of roughly €30 million to €33 billion, while expenditures will decrease by €223 million from €37 billion to €36.8 billion.

Presenting the revision to Friday’s cabinet session, Deputy Prime Minister and Finance Minister Marko Primorac said that the primary reasons for the revision are the adjustment of pensions, the annual pension supplement and maternity benefits: “According to the national methodology, the general government deficit stands at €4 billion or, when all those items are adjusted, with the aim of transitioning to the ESA methodology, the deficit at the consolidated general government level is €2.68 billion, or 2.9% of GDP. The key characteristics of this revision are the strengthening of the living standard for citizens and pensioners in the amount of one billion euros, which will go to increasing pensions, public sector salaries, and social and maternity support programs.”


Minister Primorac said after the session that he was always happy to see cuts that will save tax payers money: “I have to admit that I'm pleased with the fact that expenditures are less than what they were before the revision, €223 million less. This obviously also means a reduction in the budget deficit. I'm happy that these funds are primarily being redirected to those who need it most, pensioners, social programs and so on. I am also happy that we are continually reducing our debt as a percentage of GDP, which will come in at 56.9 in 2025.”


After the cabinet session Minister Primorac commented on Wednesday's report from the State Statistics Bureau that saw a further increase in inflation, which came in at 4.2% higher on an annual basis in September. Inflation based on an index of consumer prices harmonized with other EU countries showed an even worse figure, at 4.6%. The report also cited Eurostat data, which indicated that inflation in Croatia, is among the highest in the Eurozone in September: “I have to admit that inflation surprised us in the summer months, coming in a little higher on a monthly basis than what we had forecast. And in that context there will definitely be a revision of that number. We had planned average annual inflation of roughly three percent, but it could come in at about half a percent higher given all of the circumstances.”


Government is forecasting GDP growth of 3.3% for this year.


Source: HRT

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