The deficit is much lower than the HRK 15.6 billion forecast by the budget revision in December, Lalovac told a press conference.
"Compared with 2013 when the deficit was HRK 16.2 billion, we can now see that the government is keeping public finances under control despite numerous problems stemming from weak economic activity," he said, expressing hope that the budget shortfall in 2015 would be according to plan and no revision would be necessary.
Speaking of the savings made, Lalovac said that all government departments had cut costs, specifying that wage expenditures had been reduced by HRK 180 million, material costs by HRK 610 million, interest rate costs by HRK 680 million, procurement costs by HRK 440 million, subsidies by HRK 165 million and other expenses by HRK 600 million.
The calculations were made using the national methodology, while the deficit calculated by the Eurostat methodology will be known in about a month and a half. Unlike the national methodology, the Eurostat methodology counts the debts of public companies, state guarantees and health service debts in the budget deficit. The Finance Ministry said that the health service had settled most of its liabilities.
Following recommendations from the European Commission as part of the Excessive Deficit Procedure (EDP), Croatia last year had to reduce its deficit by 2.3 percentage points to 4.6% of GDP and was expected to cut it further to 3.5 per cent in 2015 and to 2.7 per cent of GDP in 2016.
The Finance Ministry will present the deficit figures to the European Commission between January 15 and 20, and the Ministry hopes that no additional EDP measures will be necessary in 2015. It said that in addition to the savings made in 2014 there was additional potential to save between HRK 500 million and HRK 1 billion of budgetary funds.
(EUR 1 = HRK 7.6)