The government is proposing a 2023 budget revision under which revenue would amount to €27.7 billion, up €1.1 billion, and expenditure to €29.3 billion, up €1.2 billion, Prime Minister Andrej Plenkovic said at Thursday's cabinet session.

The main reasons for the revision are higher outlays for post-earthquake reconstruction, wages, pensions, farmers, and aid for households and enterprises due to inflation, he said.

In the revised budget, profit tax revenue is €360 million higher due to revenue from the special tax on profit, he added.

Under the revised budget, the general government deficit will be 0.3% or €235 million, which confirms that the budget is practically balanced, the prime minister said.

The government is also revising the economic growth projection for this year from 0.7% to 2.8%.

The public debt-to-GDP ratio is projected at 60.7%.

In 2016, that ratio was close to 80%, so its reduction is “a very significant achievement” which confirms that the government is pursuing a responsible public finance management policy, Plenkovic said.

The government projects this year’s inflation at 8%, up from the slightly over 6% projected in the original budget.

The budget revision is important for the continuation of economic growth, the slowing down of inflation and the safeguarding of social cohesion, the prime minister said.

“The revision reflects adjusted priorities,” he said, adding that they are the government’s fifth aid package, higher pensions and wages in the civil and public sectors, the continuation of post-earthquake reconstruction, aid for farmers and pig breeders in the wake of African swine fever, additional funds for free meals in primary schools, maternity allowances, and investments in energy diversification and transport.