Government projects GDP growth in 2021 at 9 percent

NEWS 28.10.202114:56
Tomislav Miletic/PIXSELL

Croatian government projects GDP growth in 2021 at 9.0 percent, while budget revenues for 2022 are forecast at 164.5 billion kuna (€21.9bn), Prime Minister Andrej Plenkovis said at a cabinet meeting on Thursday.

“Based on macroeconomic indicators for the national economy and external environment, and prevailing expectations, real GDP growth for 2021 is projected at 9 percent, which surpasses the real GDP level from 2019,” Plenkovic said.

Under the amended budget for 2021, revenue has been increased by HRK 3.3 billion to HRK 153.6 billion and expenditure by HRK 6 billion to HRK 173.3 billion. The budget is expected to show a deficit of HRK 19.7 billion or 4.7 percent of GDP. General government will run a shortfall of HRK 18.9 billion or 4.5 percent of GDP, the prime minister said. Based on the general government fiscal balance, the public debt to GDP ratio is expected to decrease by 4.2 percentage points to 83.1 percent of GDP this year.

Total budget revenue for 2022 is projected at HRK 164.5 billion, Plenkovic said. The government expects continued strong growth of economic activity at a rate of 4.4 percent in 2022, 3.7 percent in 2023 and 3.1 percent in 2024. The budget deficit is forecast at 2.6 percent of GDP in 2022, 2.4 percent of GDP in 2023 and 1.9 percent of GDP in 2024.

The public debt-to-GDP ratio is expected to decline to 83.1 percent of GDP in 2021, 80.7 percent in 2022, 78.0 percent in 2023 and 75.3 percent of GDP in 2024.

This indicates that in the period considered Croatia will meet the fiscal convergence criteria for joining the euro area, the prime minister said.

“Before the outbreak of the crisis, government policies were focused on achieving macroeconomic stability by laying the foundation for sustainable economic growth and stable public finance. Its policies were recognized by international financial institutions and rating agencies, which have upgraded and maintained Croatia’s credit rating at investment grade despite the negative consequences of the pandemic,” Plenkovic said.

He said that all this had given Croatia fiscal room for crisis response, adding that the projected growth rates for this and next year showed “the strength and resilience of the Croatian economy.”

(€1 = 7.52 kuna)