Prime Minister Andrej Plenkovic said on Monday that the 2023 budget was "geared towards maintaining citizens' standard of living as well as economic growth and development."

Speaking at a government session at which the government will send to the parliament a draft budget for 2023, Plenkovic said the government wanted the 2023 budget to serve the purpose of alleviating the crisis caused by Covid-19, inflation and other threats to citizens’ living standards as well as enabling the good functioning of the economy to preserve economic growth and development.

The government also wants citizens’ wages and pensions to continue growing, he said, noting that the 2023 budget included the pay rise for public sector employees agreed with trade unions.

The new budget is being adopted in the context of efforts to alleviate the crisis caused by Covid-19, the Russian aggression on Ukraine and its impact on energy and food prices, inflation and disruptions in supply chains, as well as in the context of Croatia’s imminent accession to the euro area and the Schengen area of passport-free travel, he said.

He said that the policy of public finance management in the period before the Covid-19 crisis had resulted in Croatia changing its budget deficit to a budget surplus and credit rating agencies raising the country’s rating to an investment grade, which happened in the context of strong political stability.

The government’s growth projection for this year is 5.7%, it is more modest than expectations by international economic and financial institutions, he said.

For 2023 the government projects a GDP growth of 0.7%. In 2024 growth is expected to be 2.7% and in 2025 2.6%, Plenkovic said, noting that 2023 was a transition year, specific in terms of growth.

Plenkovic said he expected the parliament to complete the debate on the draft budget for 2023 by the end of November.