March 10 (SeeNews) - Croatia's government said on Thursday it adopted the country's 2016 draft budget, projecting a budget deficit of 7.5 billion kuna ($1.1 billion /991.2 million euro), or 2.2% of the GDP.
Total budget revenues are expected to reach 114.9 billion kuna, up 4.7% on the year, while budget expenditures are seen at 122.4 billion kuna, or 3.8 billion more than last year, the government said in a statement following a regular session.
The deficit set in the draft budget is identical to the one laid down in the fiscal blueprint presented recently by the finance ministry, but both revenues and expenditures are higher.
The budgetary figures are based on projections for economic growth of 2% in 2016 - following 1.6% GDP growth last year - on the back of domestic demand. In terms of individual categories, exports of goods and other services are expected to experience the highest growth rate, the government said.
Croatia's government also added that it expects a positive inflation rate of 0.1% in 2016 and a decline in the unemployment rate to 15.8%.
If Croatia's government is able to hit its target and keep the budget gap below 2.2% of the GDP, it would be the deficit's lowest level since 2008.
The government earlier said it projects the budget deficit to narrow to 2% of the GDP in 2017 and 1.8% in 2018.
Budget revenues are expected to increase by 3.7% to 117.2 billion kuna in 2017, and by a further 3% to 120.6 billion kuna in 2018. Expenditures are expected to reach 124.4 billion kuna in 2017 and 127.2 billion kuna in 2018, it said in its fiscal blueprint adopted in February.
The 2016 budget draft is now pending approval by parliament.
(1 euro= 7.56879 Croatian kuna)