The government on Thursday adopted guidelines for state budget preparation, projecting the economy to contract by 8% in 2020 and to rebound by 5% in 2021, as well as growth of 3.4% and 3.1% for 2022 and 2023 respectively.

The government projections for 2021 put budget revenues at HRK 147.1 billion and expenditures at HRK 157.7 billion. Revenues are forecast to reach 154.3 billion in 2022 and HRK 156.7 billion in 2023.

Commenting on the projections, Finance Minister Zdravko Maric said that some of the revenues should come as European fund assistance and next year Croatia could count on HRK 25.1 billion under that scheme.

This year, the budget gap is expected at 6.7% of GDP, while in 2021 it should be reduced to 2.9%, which is within the Maastricht criteria. It would be further narrowed to 2.1% in 2022 and to 1.6% in 2023.

Public debt is expected to be around 86% of GDP in 2020. In the next three years, the ratio is due to fall by two percentage points every year.

Prime Minister Andrej Plenkovic said that the revised growth projection to eight percent was good considering the fact that the initial projections had envisaged a 9.4% downturn.

He said that the economic recovery and resilience programme was of paramount importance for the government.

(€1 = HRK 7.538011)