Marić: The Corona Crisis Has ‘Cost’ the State Budget 21 Billion Kuna!

Deputy Prime Minister and Minister of Finance Zdravko Marić reported on Thursday at the first government meeting after the summer break that, according to preliminary data, the total cost of the Covid-19 pandemic to the budget amounts to 21 billion kuna. Marić presented preliminary data indicating that in the first six months of this year, budget revenues reached 60.4 billion kuna, expenditures 77.1 billion, while the budget deficit is 16.7 billion kuna.

Since the outbreak of the Covid-19 pandemic until yesterday, there has been a recorded 17 billion kuna less in fiscalized invoices compared to the same period last year. Specifically, this year, 105.7 billion kuna was fiscalized, while in the same period last year it was 122.7 billion kuna, Marić said, adding that this data is important because fiscalization covers almost a third of the turnover in the economy.

Regarding the revenue side of the budget, Marić stated that from the beginning of the year until yesterday, revenues reached 75.9 billion kuna, which is approximately 10 percent less than in the same period last year. When isolating the segment that exclusively relates to economic activity, namely tax revenues and contributions, they are down by about seven billion kuna. When considering the originally planned effect of economic activity growth of about 2.5 percent, as well as a certain inflation rate, the decline in budget revenues compared to the planned amounts reaches about 9.5 billion kuna, Marić reported.

On the expenditure side of the budget, significantly higher needs for expenditures and outlays have been recorded, which are higher by about 11.5 billion kuna and are directly related to the Covid-19 pandemic. As Marić notes, more than half of that amount relates to aid measures and support for job preservation, for which just over six billion kuna has been paid so far, while part of the expenditures also relates to the procurement of ventilators, protective equipment, and so on.

To date, Marić emphasized, the total cost of Covid-19 to the budget amounts to 21 billion kuna, noting that these are preliminary data. Marić also states that all financing needs, or the vast majority of them, for this year have been fully met, and he says there is readiness for all challenges that will follow.

He notes that the State Bureau of Statistics will publish data on GDP for the second quarter in the coming days, when it will be seen how much the economic decline amounts to, and he announces that the government will present new, updated projections for 2020 in terms of GDP and key components at the beginning of September. Preparations are also underway for the budget for 2021, which Marić assesses as extremely important, in which, according to all projections, recovery should begin, but it is unlikely that full recovery will be achieved in the next year, he adds.

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