Prime Minister Andrej Plenković stated at the presentation of the state budget for 2025, with revenues of €33 billion and expenditures of €37 billion, that GDP growth will be 3.2 percent, child allowances will be doubled, and efforts will continue to alleviate inflationary pressures and reduce public debt.
– The budget for 2025 maintains our vision of a modern Croatia, a stable and developed European state that provides a better framework for a higher quality of life for all our citizens – said Plenković at the presentation of the state budget for 2025 and projections for 2026 and 2027 in the Croatian Parliament.
The Prime Minister highlighted three key pillars of the new budget: increasing salaries, pensions, and social benefits, strengthening purchasing power and improving the quality of life for citizens; enhancing competitiveness and innovation in the economy to keep pace with more developed EU member states; and focusing on measures related to specific social groups to achieve social effects or strengthen resilience to crises such as demographic or housing policies.
– This budget today gives us the tools to respond decisively and effectively to future challenges while ensuring stability in political, security, economic, and financial terms, as well as the security of Croatia and our citizens. With this budget, we want to build Croatia as a land of opportunity, development, and solidarity – emphasized Plenković.
He noted that GDP growth next year is expected to be 3.2 percent, 2.8 percent in 2026, and 2.6 percent in 2027. He also added that since 2016, Croatia’s GDP has increased from €47 billion to €86.4 billion by the end of this year, and that next year the absolute GDP should amount to €92.4 billion. Additionally, efforts will continue to alleviate inflationary pressures, particularly through measures regulating the prices of gas, electricity, and oil derivatives.
In December, the presentation of the demographic package
Plenković announced that a demographic package will be presented in December at the meeting of the Council for Demographic Revitalization, which will double the allowance for newborns from €309 to €618, and allow mothers to retain the full salary amount up to €3,000 for the second half of parental leave, instead of the previous maximum of €995.
In addition, €685 million has been secured for demographic measures next year, and a housing policy plan will be adopted to strengthen youth and families as well as housing affordability. Furthermore, funding for education and sports development will be increased, and through tax changes, fiscal autonomy of municipalities, cities, and counties will continue to be strengthened along with salary growth at all levels.
Policy of pension growth, improved pension adjustment formula
He stated that the policy enabling pension growth will continue, and next year the formula for pension adjustment will be improved, introducing an annual supplement and ensuring a higher additional period for each child for mothers.
– For the pension system, €8.8 billion is planned for 2025, €9.4 billion in 2026, and €9.8 billion in 2027. In total expenditures for next year, allocations for pensions and other benefits for citizens account for 30 percent of the state budget – said Plenković.
Regarding salary growth, he noted that allocations for employees in state and public services next year will amount to €8.2 billion. Additionally, care for the most vulnerable groups in society will continue, for which €903 million has been secured in the budget.
The Prime Minister also emphasized that investments in equipping and modernizing the Croatian Army will continue, reaching 2.1 percent of GDP expenditures for defense next year. Moreover, priorities remain the reconstruction from earthquakes, promoting rural development, and more.
Priority is the permanent reduction of public debt in GDP
– Our further priority will be the permanent reduction of the share of public debt in GDP and maintaining the budget deficit below the reference level of three percent of GDP. Success in these two goals will result in a general budget deficit in 2025 of 2.3 percent, 1.9 percent in 2026, and 1.8 percent in 2027 – said the Prime Minister.
Plenković also stated that they expect further reduction of public debt, which will be 57.4 percent at the end of this year, 55 percent next year, and 54.2 percent in 2027. Revenues are higher by 8.6 percent, secured by higher tax revenues, significantly faster withdrawal of European funds, and the multiannual financial framework and resilience and recovery mechanism, the Prime Minister emphasized, adding that they are in surplus by €16 billion. Expenditures are planned at €37 billion, which is 10.2 percent more than this year.
