"The main criterion in revising the budget was... social balance, citizens' living standards and ways of encouraging their optimism because we are aware that consumption is decreasing and savings deposits are rising," Kosor said in her address to members of parliament.

The revised budget envisages a cut in budget revenues of HRK 4.5 billion, and an increase in expenses of HRK 898.2 million.

Budget revenues are planned to amount to HRK 108.3 billion, and expenses to HRK 122.3 billion. Revenues from taxes and contributions are expected to drop the most.

The budgetary deficit will thus increase by 5.4 billion kuna to 14 billion, or 4.2 percent of GDP.

The budget revision was based on a projection of a real GDP drop of 1.6 percent this year.

The revised budget will ensure an additional 356 million kuna for pensions, 386 million for the unemployed and 50 million for a pro-active employment policy, an additional 600 million kuna for farm grants, 300 million kuna for compensation for damage caused by natural disasters, 100 million for maternity allowances, and 170 million for a referendum on changes to the Labour Act.

Instead of a previously planned HRK 28 billion kuna, the government intends to take loans amounting to 34.6 billion kuna for the servicing of debts due and the financing of the deficit. So far, the government has borrowed HRK 25.1 billion.

The government has proposed that the parliament also adopt a decision to keep budgetary revenues in 2011 and 2012 at the level of this year's revised budget.

The budget revision has been endorsed by parliamentary committees.

Some 50 MPs have requested to take the floor on the budget revision.