Croatian govt proposes 2.3% deficit in 2023 draft budget

The government expects GDP growth of 5.7% in 2022 and 0.7% next year in view of global circumstances, prime minister Andrej Plenkovic told a weekly cabinet meeting on Wednesday, as seen in a video recording published by the public TV HRT.

General government debt is projected at 69% of GDP next year in the budget draft, down from 71.3% forecast for 2022.

According to the government's projections, inflation is seen at 10.4% in 2022 and 5.7% next year, finance minister Marko Primorac said during the cabinet meeting.

On Tuesday, Croatia's central bank said it expects average annual inflation of 10.3% this year and 6.7% next year, and economic growth of 5.5% in 2022 and 1.0% in 2023.

The 2023 budget draft has to be approved by parliament and also by the European Commission as Croatia would join the eurozone on January 1 next year.

The government also revised on Thursday its 2022 budget plan, cutting the budget deficit target to 1.5% of GDP, from 2.8% of GDP set under the previous budget revision in May. Central government budget revenue is increased by 758.2 million kuna ($98.5 million/100.5 million euro) to 171.8 billion kuna, while the projected expenditure remains unchanged at 184.7 billion kuna, according to a document published on the government website.

The government also decided to lift the minimum gross monthly salary for 2023 to 5,274.15 kuna, up 12.52% compared to this year.

(1 euro=7.535 kuna)