Zagreb - Prime Minister Andrej Plenković said on Wednesday, while presenting the budget proposal for 2025 in parliament, that child allowances will be redoubled and that the government will continue cushioning inflation pressure and reducing the public debt.
The budget proposal for next year envisages revenues at €33 billion and expenditures at €37 billion. Total revenues would be 8.6% higher than in the 2024 budget thanks to increased tax revenues and considerably faster absorption of EU funding, while total expenditures would be 10.2% higher.
The government projects the GDP growth rate in 2025 at 3.2% and the inflation rate at 2.7%.
The general government deficit is expected to reach 2.3% of GDP in 2025 and fall to 1.9% in 2026 and 1.8% in 2027.
The public debt to GDP ratio is forecast to fall to 57.4% by the end of this year, to 56% in 2025, and 55% in 2026.
European Union countries are required by the EU Treaty to keep their budget deficits within 3 percent of GDP, and their public debt within 60 percent of GDP.
Commenting on the three pillars for the 2025 draft budget, Plenković said that one of them is an increase in wages, pension allowances and social benefits in parallel with bolstering people's purchasing power.
Another pillar is about boosting the national economy's competitiveness and innovations to ensure that Croatia can catch up with developed EU members, and the third pillar is about measures strengthening certain societal groups to achieve social effects through demographic and housing policies in order to improve the country's resilience to crises.
"This budget provides us with tools necessary for our resolute and efficient response to future challenges, while ensuring stability in the political, security, economic and financial sense," he said.
"This budget helps us to build Croatia as a country of opportunities, development and solidarity."
As for the rise in Croatia's Gross Domestic Product, with its projected increase of 3.2% in 2025, 2.8% in 2026 and 2.6% in 2027, Plenković said that since 2016, GDP has risen from €47 billion to €86.4 billion in 2024.
In 2025, it will reach €92.4 billion.
The premier promised the continuation of the trend of alleviating inflation pressure through regulation of prices of natural gas, electricity and petroleum products.
Measures for demographic revival in December
A set of measures for demographic revival will be unveiled at a meeting of the Demographic Revitalisation Council in December.
The child allowance for a newborn baby will rise from the current €309 to €618.
Mothers on maternity leave will be entitled to their full monthly wage also in the period between the child's sixth month and first year since birth, provided that it is below €3,000. So far this upper limit for the period concerned has been €995.
The allocation for the demographic revitalisation package for 2025 will be €685 million.
As for pension recipients, Plenković said that €8.8 billion will be set aside for the pension system in 2025, €9.4 billion in 2026, and €9.8 billion in 2027.
The wage budget for public-sector employees in 2025 is €8.2 billion.
Defence allocation to reach target of 2% of GDP
Next year, Croatia will invest more funds into the upgrade and modernisation of its armed forces, and the defence budget in 2025 will be equal to 2.1% of the national GDP.