Macroeconomic Forecast Croatia

BMI View: Pressures on this year's budget deficit are to the upside, and we see the government exceeding its targeted 2.8% of GDP budget deficit. Our full year deficit forecast stands at HRK8.12bn. Election-year spending increases have already started, with increases in maternity and child benefits, together with a free school textbook initiative adding 0.3% of GDP onto spending. Pensioners' debt payments this year, equal to around 1.1% of GDP, are not even included in headline deficit figures.

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