Growth in 2019 is seen at 2.8%, up from a previously projected 2.5% thanks to stronger investment activity in the first quarter. For next year and the year after, growth is forecast at 2.5% and 2.4%.

In its economic directions paper for 2018 to 2022 which the government adopted on Thursday, it predicts a steady rise in the general budget surplus, seen at 0.2% of gross domestic product in 2020 and rising to 0.4% in 2021 and to 0.8% in 2022.

The government projected this year's budget deficit at 0.3% of GDP, down from an original target of 0.4%.

Inflation is seen slowing to 0.7% this year before rising in the following years to reach 1.5% in 2020.

The government also plans to reduce public debt by 12.6% by 2022 as part of a drive to adopt the euro in the next four to five years. Public debt has fallen in the last three years from a level of around 85 percent.

The government projected total budget revenue in 2020 at 141.6 billion kuna ($21.3 billion), and sees revenue rising 2.6% in 2021 and by 2.4% in 2022 to reach 148.7 billion kuna.