Officials at the Finance Ministry say that the execution of the budget in the said period was successful, with moderate economic activity which intensified in the second quarter.
Preliminary data for July indicate that revenues continue to grow at an accelerated rate, with the growth rate of more than seven percent indicating continuation of economic activity and a good tourist season.
Tax revenues amounted to 23.1 billion kuna, 6.2 percent more than in the same period last year, while revenues from VAT grew somewhat slower, amounting to 14.5 billion kuna, a 4.8 percent increase.
According to the budgetary revision adopted in mid-July, VAT revenues are projected at 31.7 billion kuna or 6.2 percent more than last year, but one billion less than initially projected.
The Finance Ministry reduced its initial projections due to a slow down in economic growth at the beginning of this year.
Some tax revenues exceeded the projected amounts, while some were lower than expected.
Income tax revenues amounted to 1.3 billion kuna, 0.6 percent less than in the same period last year, which officials at the Finance Ministry say is due to the payment of tax refunds for last year, when there were more tax benefits.
Revenues from excise taxes on luxury products, alcohol, beer and oil products dropped, while revenues from excise taxes on tobacco, nonalcoholic drinks, coffee and personal cars increased.
Revenues from profit tax exceeded the expected amounts, totalling 2.3 billion kuna, an increase of as much as 33.7 percent in relation to the same period last year. Officials at the Finance Ministry say this was the result of companies doing good business last year.
Revenues from social contributions amounted to 15.1 billion kuna, an increase of 6.4 percent.
Insurance and other benefits accounted for most of the government spending, totalling 43.9 billion kuna.
Pension and health insurance and other benefits amounted to 23.6 billion, followed by expenses for employees, amounting to 8.1 billion.
Financial expenses amounted to 3.1 billion, subsidies amounted to 2.7 billion, material expenses totalled 2.6 billion, donations and capital aid amounted to 2.1 billion, while aid given to other countries and to local self-government units amounted to 1.6 billion.
Officials at the Finance Ministry say that the budgetary deficit of 4.8 billion kuna in the first half was entirely financed on the domestic market and would continue to be financed on the domestic market until the end of the year.
The successful financing of the deficit on the domestic market was made possible to a considerable extent by a slow down in the growth of foreign debt, with the growth rate dropping below 10 percent, the lowest foreign debt growth rate in the last three years.
The projected budgetary deficit for this year is 4.2 percent of GDP.