Croatia lawmakers adopt 2022 budget targeting euro zone entry

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ZAGREB, Dec 8 (Reuters) – The Croatian parliament approved on Wednesday a 2022 budget targeting a general deficit of 2.6% of gross domestic product as a key criteria for the country joining the euro zone the following year.

The budget was adopted with 77 votes in favour in a 151-seat parliament.

The 2021 deficit is seen at 4.5% of GDP, revised from an original target of 2.9% primarily due to increased expenditure in the health sector.

“We want the 2022 budget to accelerate economic transformation and structural reforms, increase resilience and strengthen our integration within the European Union,” Prime Minister Andrej Plenkovic said as presented the budgetary plans.

Analysts believe that revenue of 164.5 billion kuna ($24.65 billion) is adequately planned, but risks lie in maintaining control over expenditure, a similar issue to this year.

The government forecasts 2022 growth of 4.4%, which should help further reduce public debt — another criteria for entry to the euro zone — to a targeted 80.7% of GDP from 83.1% this year.

Croatia hopes to adopt the euro from Jan. 1, 2023.

Average inflation in 2022, another important criteria for the euro zone accession, is seen easing to 2.1% from 2.3% expected this year, according to the latest central bank data.

($1 = 6.6744 kuna)

(Reporting by Igor Ilic; Editing by Kirsten Donovan)


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