May 12 (SeeNews) - The Croatian government adopted on Thursday a 2022 budget revision, lifting the expected budget deficit level to 2.8% of GDP, or 13.4 billion kuna ($1.85 billion/1.78 billion euro), from initially pencilled 2.5%.
However, the deficit will be still below the 3% Maastricht threshold and the public debt-to-GDP ratio will fall by 3.6 percentage points year-on-year to 76.2% of GDP in 2022, prime minister Andrej Plenkovic told a weekly cabinet meeting, according to video file published by the government's press office.
The budget revision envisages to increase revenue by 6.6 billion kuna and hike spending by 10.9 billion kuna.
The budget revision aims to settle debts to healthcare institutions and adjust pensions; the increased expenditure reflects the deterioration of the security situation in Europe following the Russian invasion of Ukraine, the expenditure for accommodation of Ukrainian refugees, the need to secure a higher stock of natural gas and increase commodity reserves, as well as raise salaries at public institutions, and provide funds to mitigate the impact of the jump of energy prices, Plenkovic said.
The budget revision is based on assumptions of a GDP growth rate of 3% and inflation of 7.8% in 2022.
Meeting the Maastricht convergency criteria, including a deficit-to-GDP ratio below 3%, is among the conditions for euro adoption. Croatia, a member of the European Union since July 1, 2013, hopes to be ready to join the eurozone on January 1, 2023.
(1 euro=7.524 Croatian kuna)