Finance Minister Slavko Linic has announced a budget revision in the last quarter of this year in order to cover liabilities in the amount of three billion kuna in the public healthcare sector and also the issuance of state bonds on the domestic market for next week.
The minister told Croatian Radio on Wednesday that the collection of the budget revenues was lower by a few percentages than planned in H1 2013.
As for the expenditure side of the budget, the problems have been caused by three billion kuna of outstanding liabilities in the health sector and the payment of all subsidies to farmers in H1 which means one billion kuna more, but the state does not have this obligation in the rest of the year, the minister said.
"Consequently, a budget deficit in H1 is very high, exceeding the planned gap for the entire year, but we will patch it by the end of this year, however we must reschedule three billion kuna of liabilities in the health sector, as we do not believe that we will provide three billion kuna more on the revenue side," Linic said.
This revision which Linic described as technical will be conducted to register the payment of the health sector liabilities in the Q4 2013 when a draft budget for 2014 and projections of budgets for 2015 and 2016 will be also made.
The minister also announced the transaction of state bonds on the domestic market with a part of the kuna-pegged bonds and the other part denominated in foreign currencies.
The maturity of the bond will be rather long, he said adding that the interest rate could be around or slightly above 5%.
Asked about the monetisation of Croatian motorways, he said the government would accept offers of bidders with at least three billion euros for being granted concessions.
"The duration of concessions can be negotiable, but the (lower) limit of three billion kuna remains. If no one offers three billion kuna, there is no monetisation, we will handle it our own, broaden our public debt," he said.
"If we do not want to declare the bankruptcy of the state, which is out of question, we must put our assets at the service of reducing the public debt. People must realise it, it is state management, we have real estate and assets and we should make use of them to reduce our debt," Linic said commenting on the fact that the public debt is about HRK 180 billion, and if implicit liabilities of the Croatian rail operator (HZ), Croatia Airlines, and some other state companies are added, it is coming closer to the "dangerous" reference debt to-GDP ratio of 60%
