Page 114 - bne IntelliNews Southeastern Europe Outlook 2025

accepted! This budget should not be adopted – it leads to a catastrophe,” the institute wrote in a comment on its Facebook page.
6.4 Budget and Debt – Croatia
The 2025 budget approved by the Croatian government sets a goal for a 2.3% deficit of its GDP, as announced by Prime Minister Andrej Plenkovic in November.
With revenues set to increase to €33bn (due to stronger tax collection and EU funding), and spending to rise to €37bn, the budget emphasises improving citizens' quality of life through higher wages, pensions, and investment in areas like education, green transition and digital transformation.
Defence spending will reach 2% of the budget, with Croatia planning to spend €708mn on military upgrades in 2025, including HIMARS rocket systems, Bayraktar drones, Black Hawk helicopters, an anti-aircraft system and Leopard tanks.
Croatia has also announced a €685mn plan focused on supporting families and encouraging the return of emigrants in order to address its declining population and low birth rate. The new plan focuses on improving conditions for parents. Maternity allowances will triple, rising to €3,000 for the second half of parental leave, and paternity leave will double from 10 to 20 days. A one-time allowance for newborns will also double to €618. These measures aim to ease the financial burden of starting a family and encourage more people to stay in Croatia. The government is also focusing on the housing and education sectors, aiming to address challenges young families face.
Croatia is also launching a bold National Housing Policy Plan with a €1.2bn budget to tackle its housing crisis. 40% of homes remain unused while the country faces a shortage of over 230,000 apartments. The plan, which will run to 2030, focuses on three main goals: affordable housing, sustainable development and maximising unused space.
Looking ahead, Croatia’s budget deficit is expected to decrease over the next few years, from 2.3% in 2025 to 1.9% in 2026 and 1.8% in 2027. This year’s deficit is forecast to be 2.1%.
The government predicts a slight economic slowdown with 3.2% growth in 2025, down from 3.6% this year, while inflation is expected to ease to 2.7%.
Croatia is projected to remain one of the fastest-growing economies in the EU, with a public debt-to-GDP ratio falling from 57.4% in 2024 to 56% in 2025.
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