Croatia adopts 2025 budget, targets deficit of 2.3% of GDP

Croatia's parliament approved a 2025 budget on Friday that targets a general deficit of 2.3% of gross domestic product (GDP) based on projected economic growth of 3.2% seen fueled primarily by personal consumption and investment.

Croatia's parliament approved a 2025 budget on Friday that targets a general deficit of 2.3% of gross domestic product (GDP) based on projected economic growth of 3.2% seen fueled primarily by personal consumption and investment. The budget was adopted with 76 votes in favour and 65 against, with many opposition lawmakers voicing distrust in its validity.

Prime Minister Andrej Plenkovic on Friday survived a no-confidence motion in parliament against his pro-European Union government, the second this year, which was launched over a high-profile case of alleged corruption involving a former minister. Government officials said the budget, which forecast revenue of 33 billion euros and public spending of 37 billion, will promote economic growth, higher wages, pensions and social benefits as well as the green transition, digital transformation and energy efficiency.

Revenue is expected to grow by 2.7 billion euros from this year's revised budget and expenditure by 3.4 billion euros, Finance Minister Marko Primorac said. Prime Minister Plenkovic said that public debt will see a record drop to 56% of GDP in 2025 from 87% of GDP four years ago.

"In this way we reduce the financial burden on the economy and create the preconditions for stronger development," Plenkovic told lawmakers when presenting the budget. The country's inflation rate is seen stabilising at 2.7%, the government's projections show.

Primorac said the government has for the first time also prepared a national plan for 2026-2028 outlining macroeconomic trends and fiscal policies, including structural reforms and investment. ($1 = 0.9449 euros)

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