SARAJEVO: Croatia's budget deficit shrunk by nearly 70 percent in the first half of 2016, Finance Minister Zdravko Maric said, due to faster-than-expected economic growth that could exceed this year's 2 percent target.
The budget deficit in the first half amounted to 2.4 billion kuna ($352.09 million) or 0.7 percent of the gross domestic product, 5.1 billion kuna less than in the same period of the last year, Maric was quoted as saying in a statement on the finance ministry website.
"This is one-third of the last year's deficit," Maric said. He added the data were encouraging for the newest member of the European Union to achieve its 2016 deficit goal at just below 3 percent of GDP, or at 9.2 billion kuna.
The total budget revenues rose 10.5 percent to 56.3 billion kuna in the first half and spending was up 0.4 percent to 58.6 billion kuna. Primary surplus amounted to 3 billion kuna or 0.9 percent of GDP, Maric said.
"If a quality budget has been proposed also for 2017, we can expect good news from the European Commission and rating agencies," Maric said, adding that indicators showed the growth could rise toward 2.5 percent from a projected 2 percent.
Croatia will hold a snap election on Sept. 11, following the fall of the five-month-old centre-right coalition government after a vote of no-confidence last month.
Last year, Croatia's economy expanded 1.6 percent to post its first year of recovery after six straight years of recession from 2009 to 2014 that wiped out about 13 percent of output.
On Friday, Fitch Ratings downgraded Croatia's long-term local currency IDR to 'BB' from 'BB+', with negative outlook.
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