Croatian government budget surplus to GDP ratio in Q2 2022 has amounted to 1.7% of GDP. Slovenia has achieved a budget deficit of 3.6% of GDP in Q2 2022. EU budget deficit stood at 1.7%, noting an increase of 6.4 p.p. Nevertheless, both Croatia & Slovenia noted a lower public debt as a percentage of GDP due to the higher YoY GDP (a low base effect).

Croatian government budget surplus in H1 2022 stood at 1.7% of GDP, noting a solid increase of 6.4 p.p. using preliminary data. Further, Croatia is one of the countries that reported the highest increase in government surplus as a percentage of its GDP. The reason for such an improvement in the government surplus in terms of GDP lies in both the numerator and denominator of the mentioned ratio. First of the explanation, and the more important one, is an increase in Croatia’s GDP of 15.4% YoY in 2021 (also expected in preliminary data for H1 2022). But nevertheless, we want to stress out that this increase happened on the back of a low base effect, as GDP was achieved in 2020 and H1 2021 was hit by the pandemic. Nevertheless, to put things in perspective – GDP achieved in 2021 was still higher than the GDP achieved in 2019 by 6.2%, which actually gives us a real sense of an improvement. Besides the improvement in GDP, improvement was still amplified by achieving a government surplus, instead of a government deficit in the prior year. Improved government surplus was achieved primarily due to the lower government expenditures, while government revenue increased slightly, but overall stood flat.

Croatia Public Debt & Deficit (% GDP)

Source: Eurostat, InterCapital research

Public debt as % of GDP has decreased by as much as 12 p.p. YoY and has amounted to 74.3% of GDP in H1 2022, also driven by an already-mentioned increase in GDP. Croatia noted a slight nominal increase in debt, which amounted to HRK 343.7bn (+0.6% YoY). But due to a higher increase in GDP, public debt as a percentage of Croatia’s GDP decrease nevertheless and amounted to 74.3%.

Slovenia Public Debt & Deficit (% GDP)

Slovenia has noted a higher budget deficit amounting to 3.6% GDP, noting an increase of 2.6 p.p YoY in H1 2022, using preliminary data. Also, in H1 2022 Slovenia’s government debt as a percentage of Slovenian GDP noted a YoY decrease, amounting to 73.5%, due to the lower base effect of the country’s GDP.