Finmin: Negative budget trends mitigated by government measures

Measures from this year's three budget revisions have achieved macroeconomic stability and the stability of public finances and have slowed negative trends in the state budget, Finance Minister Ivan Suker said at a press conference on Friday.

Another budget review this year will not be necessary and intensive work on the 2010 budget is under way, Suker said.

At the end of September, budget revenues totalled HRK 81.1 billion, down 7.4 per cent from the same period of 2008. By comparison, the year-on-year decline in revenues at the end of the first half was 8.6 per cent.

About HRK 406 million was collected from an additional tax on salaries, pensions and other incomes in August and September, while in September alone some HRK 130 million poured into the government coffers as a result of the increase of Value Added Tax from 22 to 23 per cent and about HRK 34 million from new excise tax on mobile telephony.

Expenditures reached HRK 88.93 billion, an increase of 5.1 per cent compared with the first nine months of last year.

Suker noted that the third quarter saw a marginal drop in expenditures of 0.1 per cent.

The nominal year-on-year increase in budget expenditures at the end of June and at the end of September was roughly the same, about HRK 4.3 billion, which means that the three budget revisions in the second half of the year put a stop to the expenditure increase, Suker said.

As a result of the budget revisions, for the first time this year budget revenues were slightly higher (by some HRK 50 million) than in September 2008.

The budget deficit was HRK 7.8 billion, or HRK 1.4 billion higher than at the end of June.

Suker said that the central government deficit in 2009 was expected at about 2.8 per cent of GDP, adding that anything below 3 per cent was satisfactory, as defined in the Maastricht convergence criteria.