Plenković: Budget for 2025 Set at €37 Billion

The total revenues of the state budget for 2025 are planned at €33 billion, while expenditures are set at €37 billion, Prime Minister Andrej Plenković said on Thursday at a government session. Total revenues are higher compared to 2024 by 8.6 percent, with a significant impact on revenues from increased tax revenues, as well as significantly faster withdrawal of funds from EU funds, Plenković stated. Total expenditures are higher compared to the current plan for 2024 by 10.2 percent or €3.4 billion. The budget is primarily focused on citizens and has social, developmental, and sustainable components, Plenković assessed. It aims to ensure a better standard of living through pension and salary increases, assistance to vulnerable groups, and the implementation of measures to regulate the prices of electricity, gas, and fuel, as well as the implementation of the National Housing Policy Program, along with addressing housing for protected tenants.

He announced the continuation of investments, including the remediation of earthquake damage, as well as investments in water and communal projects, health infrastructure, railways, roads, maritime transport, sports, and rural development. According to Plenković, the budget also aligns with the goals of newly established ministries and the strategic objectives of the government regarding demographic renewal, education, green transition, and digital transformation. Thus, the budget for the Ministry of Demography and Immigration is increased by 202 percent, for Justice, Administration, and Digital Transformation by 21 percent, for Environmental Protection and Green Transition by 81 percent, and for Science, Education, and Youth by 14 percent.

Growth of 3.2 percent, inflation at 2.7 percent

The government projects a GDP growth of 3.2 percent for 2025, with an inflation rate of 2.7 percent. The general budget deficit according to ESA 2010 methodology is projected to be 2.3 percent of GDP in 2025, 1.9 percent in 2026, and 1.8 percent of GDP in 2027. A further reduction in the share of public debt in GDP is also expected, with it projected to be 57.4 percent by the end of this year, 56 percent in 2025, and 55 percent of GDP in 2026.

The government is also adopting the National Medium-Term Fiscal Structural Plan of the Republic of Croatia for the period 2025-2028 at today’s session, which is being adopted for the first time this year. Its preparation is the result of the new, revised EU Economic Governance Framework that came into effect on April 30, 2024. A key element of the framework is the new rules related to fiscal policy management and fiscal rules. Thus, instead of the Stability Program and the National Reform Program, each EU member state is now required to submit a National Medium-Term Fiscal Structural Plan. Reform activities and investments rely on activities within the National Recovery and Resilience Plan in the first two years of this plan, as well as on improved absorption of European structural and investment funds.