ZAGREB, 27 May 2022 - The parliament on Friday passed by a majority vote a revised budget for 2022, whereby the expenditure side will increase by HRK 10.9 billion to HRK 184.7 billion and the revenues will go up by 6.6 billion to HRK 171 billion.

As a result, this year's budget deficit will widen from the initial projections of 2.6% of the GDP to the deficit-to-GDP ratio of 2.8%.

Most of the rejigged budget outlays refer to the health system, in the amount of HRK 4 billion, of which the largest share will be used to cover hospitals' and pharmacies' debt to suppliers.

The opposition MPs who voted against the budget revision criticized the proposal as bad.

In mid-may, the Fiscal Policy Commission said that it believed that the proposed 2022 budget revision was appropriate to the current circumstances however, this independent body underscores that it is necessary for Croatia to absorb more EU funds to fund investments and schemes to boost productivity and implement cost-cutting reforms.

In a press release released on 17 May, the commission underscored the need to implement reforms to limit expenditure for healthcare, pensions, and unemployment benefits.

Also today, the parliament passed a law on the registry of persons with disabilities.

The legislation on investment stimulation was today endorsed, providing for some additional benefits for users of state subsidies for investments in the event when their projects are affected by extraordinary circumstances caused by the COVID-19 pandemic.

(€1 = HRK 7.529160)

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ZAGREB, 12 May 2022 - Finance Minister Zdravko Marić said on Thursday that the budget revision proposal for this year envisages HRK 75 million for gas supplies, but that that item is "open," adding that the revision should be sufficient until the technical revision usually done at the end of the year.

Answering reporters' questions, Marić said that "HRK 75 million has been secured for gas procurement, which isn't a big amount but that item is still open and a redistribution of funds is still possible."

When it comes to guarantees, the total amount is about HRK 1 billion, said Marić, adding that the model for securing gas supplies for next season will be presented when it is finalised.

He said that the objective is to find a model that will secure adequate filling of storage capacity and ensure everything that is necessary for the next heating season and that the relevant ministries, Croatian Bank for Reconstruction and Development as well as representatives of gas suppliers are working out the model.

Asked if that meant that the state would be involved in supplying gas and filling storage facilities, Marić answered affirmatively, confirming that that implied cooperation between the state and the HEP state-owned electricity provider.

On Saturday, Marić said that in normal circumstances the period between two heating seasons is used to fill gas storage facilities. However, in the current disrupted circumstances and given the exceptionally high price of gas, small gas suppliers can hardly cope with it financially, he said then.

Budget revision will be sufficient until technical review at the end of the year

Marić said that the current budget revision should be sufficient until the end of the year.

"At the end of the year... we have a technical budget revision which in fact just states the situation with budget revenue and expenditure. If in the meantime... some significant deviation occurs, we will have to be prepared for it, however, this revision should be sufficient until the end of the year, until the technical review," he said.

Presenting the budget revision at the cabinet meeting on Thursday, Marić said that the guarantee reserve had been increased as one guarantee had been protested. Asked which guarantee it was, he said that VTB Bank had protested a guarantee for Brodosplit amounting to €32 million.

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ZAGREB, 4 Nov 2021 - Opposition MPs said on Wednesday, in a debate about a draft budget revision for 2021, that they would not support it because the expenditure was not transparent and the budget revision did not envisage the reconstruction of areas hit by last year's earthquakes or reforms. 

Sandra Benčić of the Green-Left Bloc said the budget revision was an act of capitulation by the government to the post-earthquake reconstruction of Zagreb and Banovina.

There were no plans for reconstruction, not even public buildings with unproblematic property-rights relations have been reconstructed, she warned.

We do not know if an extension of the deadline to use the money from the EU Solidarity Fund will be requested "or how much of it we will have to return because we will not be able to use it," she said, adding that citizens were not a government priority but the purchase of fighter jets was.

Anka Mrak Taritaš recalled that the budget revision was the second budget revision this year.

It shows that the coronavirus pandemic has laid bare all the problems in the health system and that it is not managed well, she said, adding that there was also no post-earthquake reconstruction or reforms.

The results of the population census will show how serious the demographic situation is and a demographic strategy needs to be adopted urgently, Mrak Taritaš said, adding that a possible solution was to hire foreign nationals.

Domagoj Hajduković of the Social Democrats, too, said he would not support the budget revision, noting that budget funds had been spent in a non-transparent way.

Siniša Hajdaš Dončić of the Social Democratic Party said he would vote against the budget revision because of poor expenditure management.

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