Data on fiscalization in July and August ‘shows a slightly better picture’

Finance Minister Zdravko Marić stated on Wednesday that the data on fiscalized invoices in July and the current part of August shows "a slightly better picture than originally expected," and announced a more detailed report on budget execution for the Government meeting on Thursday. 

"July, now and a good part of August, in terms of fiscalized invoices, shows a slightly better picture than we originally expected, but it is not our intention to beautify anything, the year is what it is," Marić told reporters in front of the Banski Dvori before the meeting of the narrower cabinet of the Government.

The Finance Minister announced that a more detailed report on budget execution, revenues and expenditures, and fiscalization will be presented at tomorrow’s Government meeting, the first after the summer break. When asked what can be expected in the fall, considering the requests from entrepreneurs to continue with certain aid measures, and what will happen with the moratorium on the implementation of foreclosures, Marić replied that certain measures for so-called special circumstances have their lifespan. 

"We must ensure the functioning of the state, the system, the liquidity of the entire economy. We have taken certain measures, which have a strong unconventional approach, the state has paid subsidies, postponed taxes and contributions, but everything has a lifespan," he said.

He also reminded that the Government extended the deadlines for the non-implementation of foreclosures and that this also has its lifespan. The Government, namely, at a meeting in mid-July extended the duration of special circumstances until October 18 of this year, which relates to the suspension of the implementation of foreclosures on the financial assets of citizens and individuals, as well as the implementation of all foreclosure procedures.

"We are monitoring the situation, as we have been doing all the time since the beginning of the crisis. Now we have several important steps ahead of us regarding the economic and financial part – preparing the budget for next year, some tax changes," said the Finance Minister, announcing that tax changes, which are expected to come into effect at the beginning of next year, will be presented in the coming days. He also announced that the Government will likely come out with the latest projections of economic trends at a meeting probably at the beginning of September. 

The Government presented the last projections at the end of April this year in the Convergence Program for 2020 and 2021, in which it projected a GDP decline of 9.4 percent for this year, and a recovery rate of 6.1 percent for 2021. According to these projections, the general government budget deficit this year would amount to 6.8 percent of GDP, while in 2021 it would decrease to 2.4 percent of GDP, and an increase in the share of public debt in GDP in 2020 by 13.5 percentage points, to 86.7 percent of GDP, is expected, primarily due to increased borrowing needs caused by the negative fiscal effect of the coronavirus pandemic. In 2021, according to the projections from the end of April, it is expected that the share of public debt in GDP will decrease by 3.5 percentage points, to  83.2 percent of GDP. 

Responding today in front of the Banski Dvori to reporters’ questions, the Finance Minister also reminded that about 22 billion euros of money that would be allocated to Croatia in the upcoming period from EU funds is not intended for "plugging budget holes." 

From the multiannual financial framework over the next seven years, it is about 12 billion euros, which, as before, means payments into the EU annual budget, drawing funds based on projects of various purposes. About 10 billion euros allocated for Croatia from the Recovery Fund will be distributed over a period of four years, with an emphasis on the first two years and also linked to reforms and investments, Marić reminded.

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