Principle Of Equilibrium In National Budget System

Branka Vukojević ()
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Branka Vukojević: Porezna uprava Federacije Bosne i Hercegovine

Poslovna izvrsnost/Business Excellence, 2016, vol. 10, issue 2, 241-258

Abstract: The development of the budget issues is accompanied by the emergence of numerous budgetary principles, of which the principle of budgetary balance should be specially emphasized. That is because this principle led to differing opinions between representatives of classical economic thought and Keynesian or neokeynesian school. The first are against any surplus or deficit in the state budget, while others in the budget deficit see a means of exit from the economic crisis. In this paper the balance in the Croatian state budget is analysed. The research has shown that there is a positive correlation between the budget deficit and the real rate of GDP growth. In addition, the author found that the Croatian budget has the characteristics of systematic budget deficit and, to a certain extent, it reflects the anti-cyclical economic policy. Due to the unfavourable image of public finance measured by gross debt to GDP ratio and by budget deficit to GDP ratio, Croatia was required to enter the excessive deficit procedure. This will significantly limit the government spending. Furthermore, the implementation of structural reforms are required, which should return the state budget back into the balance without compromising the economic growth.

Keywords: Budgetary principles; budget deficit; Maastricht criteria; excessive deficit procedure (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:zag:busexc:v:10:y:2016:i:2:p:241-258

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