Croatia's consolidated central government deficit in 2015 was HRK 9.6 billion or 2.9 percent of GDP according to the GFS 2001 methodology, preliminary data provided by the Ministry of Finance show.

The deficit was less than planned by the former government and was due to a higher increase in budget revenues than in expenditures. A budget revision conducted in September 2015 aimed for a deficit of HRK 12.5 billion or 3.8 percent of GDP.

"The annual reduction of the deficit by nearly HRK 3.5 billion or 26.7 percent is the result of a considerably higher increase in revenues than in expenditures," analysts at Raiffeisebank Austria (RBA) said in their comment on Wednesday.

Total consolidated central government revenue increased by 7.8 percent from 2014 to HRK 127.2 billion.

On the other hand, total expenditure, which includes current operating expenditure and changes to non-financial assets, reached HRK 136.8 billion, up 4.3 percent.

Data for consolidated general government, which includes the consolidated central government and local government budgets, are not available yet. In 2014 the local government budgets recorded a marginal surplus of 0.1 percent.

"For a final assessment of whether or not fiscal consolidation was achieved on the expenditure side of the budget in 2015, we should wait for data for the local government units and hence for the general government budget," RBA analysts said.

For the purposes of reporting to the European Commission and relevant statistical comparisons with other states, the use of Eurostat's ESA2010 methodology is required. According to this methodology, the transfer of pension contributions from the second to the first pension pillar does not qualify as income and their amount last year is estimated at HRK 1.3 billion kuna. On the other hand, ESA2010 treats all due but unpaid obligations as expenditure.

"According to the latest report on government work in the 2011-2015 term, (such obligations) amounted to nearly HRK 3 billion at the end of September 2015. Therefore, in the baseline scenario we expect the consolidated general government deficit under the ESA2010 methodology to reach nearly HRK 13.9 billion or 4.2 percent of GDP, which corresponds to the latest projections of the European Commission," RBA said.

Based on the ESA2010 methodology, the general government deficit could be as much as 25 percent or HRK 4.5 billion lower than in 2014. "Although the risk of unpaid obligations increasing noticeably should not be ignored, especially in the health sector, the fact remains that a certain degree of fiscal consolidation, of about 1.5 percentage points of GDP, was reached last year," RBA said. 


(EUR 1 = HRK 7.64)

Latest news

Syrian opposition rules out future role for President al-Assad

The Syrian opposition said Friday it would not accept any role for President Bashar al-Assad in the future of the war-torn country, reacting to a recent US shift saying that removing al-Assad is no longer a priority for Washington.

Russian Army integrates breakaway forces of Georgian province

Parts of the small fighting forces of the Georgian breakaway province of South Ossetia have been placed under Russian military control, Russian Defence Minister Sergei Shoigu said on Friday.

Czech Republic's Pilsner Urquell beer is now Japanese

Japanese brewing company Asahi completed its takeover of the Czech brewery Pilsner Urquell on Friday, Asahi said in a statement.

Judge approves 25-million-dollar settlement of Trump University case

A US district judge on Friday approved a 25-million-dollar settlement of lawsuits and state fraud allegations against Trump University, the US president's now-defunct business venture.

Former Thai premier Thaksin to junta on reconciliation: 'Cut me out'

Former Thai prime minister Thaksin Shinawatra on Friday announced that he is not interested in the junta-led reconciliation process, three days after the junta handed him a half-a-billion-dollar tax bill for his past business deal.

Dalic: We welcome possible deal between Agrokor and banks

The government welcomes the possibility of an agreement being concluded between the Agrokor food company and creditor banks, and the bill on vitally important companies is not a fallback plan but the result of the government's care for the overall economic and financial stability of Croatia, Deputy Prime Minister and Minister of Economy Martina Dalic told a press conference in Zagreb on Friday.

Croatia, China sign action plan for cooperation in agriculture

The Croatian and Chinese ministries of agriculture on Friday signed an action plan for cooperation in the field of agriculture for the period 2017-2018, the Croatian ministry said in a statement.

ZSE indices up, Agrokor shares in focus of investor interest

The Zagreb Stock Exchange (ZSE) indices on Friday rose by more than 1.8%, with stocks of the Agrokor food and retail concern being in the focus of investor interest again.

Berlin police defend handling of Berlin market attacker

Berlin police defended themselves on Friday against accusations that they stopped surveillance on Berlin Christmas market attacker despite knowing in June 2016 he was dangerous.

Croatia, creditors tailor emergency measures to save tottering giant

Croatia's tottering retail and food giant Agrokor reached an agreement with its creditors, putting its debts standby and allowing it to continue working during emergency restructuring, the Croatian branch of Austria's Erste Bank said Friday.

Agrokor's creditors say standstill agreement to go into force today

A standstill agreement regarding the Agrokor concern's existing financial obligations to banks will take effect on Friday, additional capital will be injected into the concern in the coming days and the concern will be actively restructured, which includes a change of its management, it was said on Friday after a meeting between Agrokor's suppliers and creditor banks.

Palestinians, UN slam Israel's new settlement plan

Palestinians, Israeli activists and the UN lambasted the government of Israeli Prime Minister Benjamin Netanyahu on Friday, a day after it gave the go-ahead for the first new West Bank settlement in a quarter of a century.

South Sudan rebels release three abducted foreign oil workers

South Sudanese rebels have released three foreign engineers they abducted in early March in the oil-rich Upper Nile region, Foreign Affairs Ministry official Mawein Makol Arik said on Friday.

Turkish opposition: Imprisoned party chief has gone on hunger strike

The head of Turkey's pro-Kurdish opposition party has launched a hunger strike from prison.

European leagues threaten Champions League schedule clashes

The European Professional Football Leagues (EPFL) on Friday threatened schedule clashes on Champions League matchdays in an ongoing dispute with the governing body UEFA.

Danish court revokes citizenship of IS volunteer

A Danish appellate court on Friday stripped a man of his Danish citizenship for volunteering to fight for the extremist Islamic State in Syria.

Banks and Agrokor agree on key elements of standstill agreement

Member banks of the coordinating committee of financial creditors and representatives of the Agrokor food company have in principle agreed on key elements of a standstill agreement, which is expected to be signed later today, announcing changes in the company's management team, Erste Bank said in a statement on Friday afternoon.

Syrian man on trial in Sweden; mosque attack labelled terrorism

A Syrian man went on trial Friday in the southern Swedish city of Malmo, charged with terrorism and arson after an attack last year on a building used as an assembly hall by Shiite Muslims.