The Croatian government budget ran a deficit of HRK 3.5 billion (€466m, or 0.7% of GDP, in the first half of 2022, Finance Minister Marko Primorac reported at the cabinet meeting on Thursday.

Revenues totalled HRK 79.3 billion, increasing by 7.0% from the first half of 2021, while expenditures decreased by 1.4% to HRK 82.8 billion.

Extrabudgetary users ran a surplus of HRK 1.2 billion, or 0.3% of GDP, while local and regional government units and county road directorates ran a surplus of HRK 2.2 billion, or 0.5% of GDP.

Primorac said that macroeconomic indicators show that the unfavourable global circumstances resulting from Russia’s invasion of Ukraine and increased inflationary pressures have not seriously jeopardised Croatia’s growth for now.

In the first half of 2022, compared with the same period in 2021, Croatia’s GDP grew by 7.4%, industrial production rose by 2.8%, the number of tourist overnight stays went up by 128% and the number of insurance policy holders with the Croatian Pension Insurance Fund increased by 2.6%, indicating positive labour market trends.

The number of registered jobseekers fell by 19.5% to 120,300, while the inflation rate reached 8.6%, mainly driven by increased prices of food and soft drinks (+12.5%) and energy (+16.3%). The increase in energy prices was mostly due to higher prices of fuels and lubricants, which went up by 28.6%, the finance minister said.

(€1 = HRK 7.53)