Page 67 - Central & Southeast Outlook 2020

Fitch also forecasts the general government budget will remain broadly balanced in 2019-2021. “Fiscal dynamics are underpinned by the authorities' track record and commitment to fiscal prudence as well as favourable macroeconomic and financial conditions,” the rating agency said in December.
Compared to 2019, spending will increase by 6% to HRK147.3bn, while revenues will rise by 5.4% to HRK145.1bn.
With elections in both December 2019/January 2020 and again towards the end of 2020, there has been strong pressure on the government to raise the salaries of public sector workers.
At the beginning of December, the government reached a deal with teachers that enabled children to return to school after weeks of strike action. Pressure from other categories of public sector workers will most likely continue despite the government’s efforts to resist any increases that could jeopardise the budget.
“Growing social pressure to increase expenditure or delay key reforms, as was the case with the plan to increase the retirement age to 67 years, represent a modest risk, particularly ahead of a busy electoral calendar. However, the risk of abrupt fiscal policy changes is mitigated by an improving policy framework and the commitment to join the ERM II,” commented Fitch.
3.5 ​Budget - Kosovo
Kosovo will probably enter the new year without having adopted a state budget for 2020 due to the delay in forming a new government following the October election.
Former finance minister Avdullah Hoti from the Democratic League of Kosovo (LDK), which is expected to join Vetevendosje in government, said that the ​2020​​budget​will be drafted by the next government, and he also indicated that he will probably be the finance minister in the next cabinet.
Kosovo​posted a ​budget​surplus €14mn in the first nine months of 2019, compared to a deficit of €21.6mn a year earlier, the finance ministry announced.
According to the World Bank, Kosovo's overall budget deficit is expected to deepen to 3.2% of GDP in 2020 from just below 3% of GDP in 2019. Public revenues are projected at 27.2% of GDP in 2020 and public expenditures at 30.4% of GDP.
The World Bank said that s​everal large public investment projects are expected to advance, such as railway and regional road projects
67​ CESE Outlook 2020​ ​ ​www.intellinews.com