Amendments to the state budget for 2021 project an increase in revenue by 3 billion kuna (€400m) from 147.3 billion kuna (€19.6bn) to 150.3 billion kuna (€20bn), as well as an increase in spending by 9.4 billion kuna (€1.2bn) to 167.4 billion (€22 billion), Prime Minister, Andrej Plenkovic, said in a government session on Wednesday.

The government will send the draft budget revision to Parliament later on Wednesday.

The budget deficit is expected to total 17.1 billion kuna (€2.3bn), or 4.3 percent of GDP, and the general government deficit, according to ESA 2010 methodology, will total 15.3 billion kuna (€2bn), or 3.8 percent of GDP.

He added that the deficit should not “jeopardise the planned dynamic” of Croatia’s accession to the euro zone, state agency Hina reported.

Plenkovic said that that the main purpose of the budget revision was to cover the ballooning costs of the health system, and added that he expected the public-debt-to GDP ratio to drop in 2021 to 86.6 percent, or 2.2 percentage points down from 2020.

He said that before the start of the coronavirus crisis, his government’s policies were “geared towards achieving macroeconomic stability by creating foundations for sustainable economic growth and stabilisation of public finances,” which, he said, was recognised by credit rating agencies, and “one of the results was Croatia’s entry to the European Exchange Rate Mechanism II in July 2020,” Hina reported.

“In 2021, a 5.2 percent real GDP growth is expected,” Plenkovic said.

(€1 = 7.51 kuna)