October 29 (SeeNews) - Croatia's budget draft for next year sets the general budget deficit at 2.6% of the gross domestic product (GDP), down from 4.5% expected this year, as the Adriatic country aspires to join the euro zone in January 2023.
“The budget deficit is to decline further to 2.4% in 2023 and 1.9% in 2024. The share of public deficit in GDP is to be slashed from an expected 83.1% this year to 80.7% next year, to 78% in 2023 and to 75.3% in 2024. All this is in line with our policy to meet the criteria to enter the euro zone,” prime minister Andrej Plenkovic told a weekly cabinet meeting on Thursday, as seen in a video published on the government's website.
A budget deficit below 3% of GDP is one of the criteria for joining the euro zone.
For this year, Croatia initially planned a budget deficit of 2.9% but lifted it to 3.8% in June on due to a growing spending of the healthcare sector related to the Covid pandemic.
Plenkovic said on Thursday that the 2021 budget deficit for 2021 is expected to be 18.9 billion kuna ($2.9 billion/2.5 billion euro), while the share of public debt in GDP is to decline by 4.2 percentage points on the year.
Real GDP growth this year is projected at 9%, following an 8.4% contraction last year, the prime minister also said. The country's economy is to expand 4.4% next year, by 3.7% in 2023 and 3.1% in 2024, he added.
(1 euro=7.523 Croatian kuna)