Zagreb - Finance Minister Marko Primorac told parliament on Thursday that this year's budget revision aims to fund higher pensions, public sector wages, social benefits, parental allowances and the government's ninth subsidy package.
He said the rise in public spending reflects the government's policies to help those most in need, including low-income citizens and pensioners, as well as recipients of the inclusive allowance. "We saw this not only as a responsibility but as an obligation, which pushed spending up by €1 billion."
Primorac acknowledged that pensions, especially the lowest, should be higher, noting that the €6 annual supplement per year of service would ideally be larger.
He also highlighted increased parental allowances, social benefits, notably the inclusive allowance, and subsidies for vulnerable consumers under the ninth package, worth around €50 million, aimed at gradually phasing out dependency on subsidies.
He said total revenues now stand at €33 billion, with expenditures of €36.8 billion, leaving a deficit of €3.8 billion (4% of GDP). Local government units, initially planned to have a surplus of €520 million, are expected to post a deficit of €333 million, equivalent to 1% of GDP.
Despite higher spending, Primorac said fiscal space has been maintained, keeping the deficit below 3% of GDP, allowing further reduction of the public debt-to-GDP ratio and room for emergency interventions.