In the first six months of 2016, Croatia's budget deficit came to HRK 2.4 billion, making up 0.7 % of GDP, and falling by 5.1 billion kuna compared to H1 2015, Finance Minister Zdravko Maric said at a news conference in Zagreb on Friday. 

The deficit in H1 2016 was equivalent to a third of the budget deficit in 2015, Maric said and added that it was encouraging that Croatia would manage to reach the targeted deficit in 2016.

The overall state revenues in H1 2016 were HRK 56.3 billion, rising by 10.5% as against the corresponding period in 2015. The total expenditures went up by 0.4% to HRK 58.6 billion in H1 2016. The primary surplus in the said period amounted to 3 billion kuna or 0.9% of GDP.

"We can expect good news from the European Commission and from ratings agencies provided that a quality budget for 2017 is put forward," he said.

The positive trends in the state budget are on the back of macroeconomic indicators showing better-than-expected results such as a 2.7% rise in the country's GDP in Q1, a 5.4% rise in industrial output over the first five months, growing consumption (+3.4%) and positive indicators in the tourism and construction sectors.

All this heralds the possibility of GDP for 2016 exceeding the projected 2 percent rate, according to the minister.

Presenting the preliminary figures about the budget execution in H1 2016, Maric said that the rise in revenues could be ascribed to higher tax revenues as well as to better absorption of EU funds.

The collection of taxes increased by 8.1% to HRK 34.3 billion. The contribution to the budget revenues from Value Added Tax (VAT) revenues increased by 1% to HRK 20.5 billion.

Out of the planned collection of 1.6 billion kuna from privatisation, 400 million was realised through the sale of state-owned real estate, the Koncar company's shares and several hotel companies.

As for budget expenditures, outlays for pensions increased by 146.6 million to 18.4 billion kuna.

The minister, however, warned that 2017 would be more challenging with a sizeable foreign debt redemption, with the maturity of two domestic bonds in the amount of HRK 9.5 billion plus an international bond worth 1.5 billion dollars, and a bond in the amount of a billion euros for the motorway sector.

(EUR 1 = HRK 7.5)

Related stories

Budget gap to be 2.2% of projected GDP

Government budget deficit halved to 1.2% of GDP

Croatia's budget gap in first ten months HRK 6.3 billion

Budget revenues planned at HRK 113b, expenditures at HRK 120.4b

FinMin: Budget almost balanced, expenditures under control

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.