Page 66 - Central & Southeast Outlook 2020

With agreement finally reached on the appointment of Zoran Tegeltija as Bosnia’s new prime minister, the priority of his new government will be adopting the state budget for 2020.
Raiffeisen analysts commented: “we expect that the general budget balance will persist within the surplus area of 1.0% of GDP. Political agreement on the budget at the FB&H entity level is still pending and should be reached during Q1 2020.”
3.3 ​Budget - Bulgaria
Bulgaria’s parliament approved a balanced budget for 2020,​setting revenue and spending at BGN46.8bn (€23.9bn) each. The budget envisages higher spending on pensions, wages of teachers and workers in the public sector, and increased spending on healthcare.
These costs will be covered by higher revenue from value added tax, excise duty and personal income taxes. Tax revenue is planned at BGN26.1bn, up from BGN23.1bn in 2019.
However, according to Raiffeisen Research, Bulgaria’s budget for 2020, which is intended to be balanced, is a repetition of the previous budget, which “replaced urgent structural reforms with more budgetary expenditure on unreformed sectors”.
Critics of the 2020 budget have said that the government has not included any buffers that could be used in case of economic crisis. The government has responded that aiming for a balanced budget is in itself a buffer.
3.4 ​Budget - Croatia
The Croatian parliament approved the 2020 budget in mid-November, targeting a 0.2% of GDP surplus,​broadly in line with the budgets of 2017, 2018 and 2019, which have also been close to balanced.
The 2020 budget is based on a forecast of 2.5% economic growth in 2020, down slightly from the 2.9% projected for this year.
The European Commission forecasts the budget will remain balance in 2020-2021. It notes that while tax revenue is expected to grow at a slower pace than nominal GDP, due to further tax cuts, EU funds will continue supporting revenues. “Expenditure growth should continue in 2020 and moderate somewhat in 2021, largely due to the strong base effect of the rising wage bill, investment and capital transfers in 2018-2019. Additional savings are expected in interest payments, most notably in 2020, as a sizable portion of maturing debt is refinanced at lower rates,” said the European Commission in its Autumn Forecast.
66​ CESE Outlook 2020​ ​ ​www.intellinews.com