Finance Minister Zdravko Maric said on Monday this year's drop in budgetary revenues would be somewhat lower than initially forecast.

Responding to questions from the press, he said budgetary revenues were more or less the same and that tax revenues this year so far, including the first two and a half months before the coronavirus crisis, dropped 12.5%.

Speaking of fiscalised receipts, Maric said that this month their number and amount in retail was almost at last year’s level while tourism was at 40% which, he added, was better than in September.

He recalled that the government recently projected that this year’s economic downturn would be 8% instead of the previously projected 9.4%.

Asked about a 2020 state budget revision which the government will discuss this week, Maric said the Health Ministry would receive HRK 1.34 billion to service hospitals’ and pharmacies’ debts to wholesale drug suppliers and that HRK 200 million was intended for the Croatian Health Insurance Fund.

This package of measures totals HRK 1.84 billion, he said. Asked where the money would be found in the revised budget, he said everything would be presented at the cabinet meeting on Thursday.

He said parliament was expected to debate the budget revision next week and vote on it on November 11.

Budget deficit almost HRK 30 billion

Maric said the revision would bring the budget deficit to 8% of GDP, or almost HRK 30 billion. This includes the HRK 8 billion already paid or to be paid to help the economy and HRK 2.5 million in tax write-offs, but the fall in economic activity, which has caused a drop in revenues, is much higher, he added.

Maric said the revised budget would focus on the economy, job retention and healthcare. He underlined that pensions “have never been nor will they be in question.”

However, he added, it is also necessary to look ahead given the budgets for the next three years, the drafts of which the government will also discuss on Thursday.

This year the public debt will rise to 86-87% of GDP but it is expected to start falling already as of 2021 by two percentage points a year.

Unlike the measures put in place to help the economy in March, which were primarily financed from domestic sources and budget savings, the current ones are expected to be financed primarily from European funds, said Maric.

For next year he underlined a recovery plan which will comprise investments and reforms and which is expected to be activated by the end of 2021. Available in the meantime are certain advances from European funds.

(€1 = HRK 7.57)