Croatia's general govt budget swings to surplus in 2022

Consolidated debt amounted to 347.199 billion kuna, or 68.4% of GDP, at the end of 2022 while a year earlier it stood at 343.787 billion kuna, or 78.4% of GDP, the statistical office said in the April 2023 notification of its excessive deficit procedure report.

After a significant deficit in 2021 due to the activities related to the COVID-19 pandemic, 2022 was marked by a trend of increasing tax revenues, social contributions and received capital transfers, whose impact is less visible due to the inclusion of the measures in the context of high energy prices in the general government expenditure, according to the report.

The measures aimed to mitigate the growth in energy prices mostly have an impact on the increase in subsidies on products related to price caps, as well as on the increase in social assistance benefits for unemployed persons and pensioners, the statistical office explained. From the point of view of the income of the general government sector, the measures had a negative impact on tax revenues due to the reduction of VAT and excise duties on energy products, while the amount of income and wealth taxes was positively affected by the additional profit tax.

The fiscal surveillance of the European Union over the member states is based on the excessive deficit procedure report, which they submit to the European Commission twice a year. The Maastricht Treaty defines two main criteria of the fiscal surveillance: a deficit-to-GDP ratio and a debt-to-GDP ratio must not exceed the reference values of 3% and 60%, respectively.

Croatia joined the eurozone as its 20th member on January 1, 2023.

($ = 0.910 euro)