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Oct 21, 2022 16:58 EEST
October 21 (SeeNews) - Croatia's consolidated general government budget was in deficit of 11.342 billion kuna ($1.471 billion/1.505 billion euro) equivalent of 2.6% of GDP last year under revised data, compared to a gap of 27.788 billion kuna, or 7.3% of GDP in 2020, the statistical office said on Friday in the October 2022 notification of its excessive deficit procedure report.
Consolidated debt at the end of 2021 amounted to 343.8 billion kuna, or 78.4% of GDP, while in 2020 it totalled 330.6 billion kuna, or 87% of GDP, the statistical office said.
The statistical office has lowered the deficit figure for last year from 12.438 billion kuna, equivalent to 2.9% of GDP it announced in the previous notification of the report in April. It also cut the consolidated debt figure for last year which stood at 343.609 billion kuna, equivalent to 79.8% of GDP, in the notification six months ago.
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.
The deficit of 14.967 billion kuna, or 3.4% of GDP, in the achieved working balance of the state budget, despite an improvement of 7.015 billion kuna compared to the previous year, had a big impact on the deficit amount in 2021, according to the October report. The reason for deficit of the working balance of the state budget were government's measures on the expenditure side aimed at preserving jobs at employers whose economic activity has been disrupted due to the COVID-19 pandemic and to finance costs to preserve the health of citizens, which continued in 2021.
In 2021, taxes on production and import were collected in the amount of 83.088 billion kuna, an increase of 17.5% compared to 2020, while the current taxes on income and wealth were collected in the amount of 24.552 billion kuna, 0.6% lower compared to the previous year. Furthermore, net social contribution revenues amounted to 48.868 billion kuna in 2021, 10.7% more than in 2020.
After a significant deficit in 2020 due to pandemic activities, in 2021 there was a trend of increasing tax revenues, social contributions, improving the financial performance of extrabudgetary users and public companies and received capital and current transfers. The decline in the deficit was also affected by the reduction of certain expenditure categories, such as gross fixed capital formation, interests paid and subsidies paid, the statistical office said.
Croatia will join the eurozone as its 20th member on January 1, 2023.
(1 euro=7.534 Croatian kuna)
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