June 3 (SeeNews) - Croatia's government adopted a revision of this year's budget, increasing the expected general government deficit to 3.8% of the projected gross domestic product (GDP), mainly in order to cover the costs of the healthcare system, it said.
The higher deficit is not expected to jeopardise the planned dynamics of Croatia's accession to the euro area, prime minister Andrej Plenkovic said in a press release on Wednesday.
Croatia planned a general government deficit equivalent to 2.9% of GDP in the original 2021 budget.
Total budget revenue is now projected to increase by 3 billion kuna ($487.3 million/399.7 million euro) to 150.3 billion kuna, while total expenses are expected to reach 167.4 billion kuna, 9.4 billion kuna more than previously anticipated.
The government debt-to-GDP ratio is expected to fall by 2.2 percentage points year-on-year to 86.6% at the end of 2021.
The cabinet expects Croatia's GDP to grow by 5.2% in 2021 and 6.7% in 2022.
However, the full recovery of some sectors, such as tourism and related services is not expected to take place before 2023 or 2024, finance minister, Zdravko Maric said in the press release.
(1 euro = 7.50461 kuna)