In the latest IPF Note Mihaela Bronić, Katarina Ott, Simona Prijaković, Branko Stanić, Romario Marijanović and Marta Soldić analyse the budget outturns of all Croatian municipalities, cities, and counties in 2023 and 2024, based on the latest data from the Ministry of Finance. The analysis shows strong growth in total revenues and expenditures, but it also continues to point to pronounced differences in the financial position of local government units, particularly related to their geographic location, population size, and type of local government unit.

In the period from 2019 to 2024, total revenues of all local government units nearly doubled – from 3.9 billion euro to 6.58 billion euro – while total expenditures increased from 4.02 billion euro to 6.37 billion euro. After a number of years in which total expenditures exceeded total revenues, local government units as a whole recorded budget surpluses in the period from 2022 to 2024. Nevertheless, at the level of individual municipalities, cities, and counties, significant differences in the level of surplus/deficit persist.

The authors caution that high surpluses, as well as high deficits, do not necessarily indicate good or poor management of local public finances. A significant share of funds may stem from one-off grants or be tied to the implementation of capital projects. Therefore, to understand   financial position of an individual local government unit, it is necessary to analyse the structure of total revenues and expenditures and to use additional data sources, including budgetary and extra-budgetary users as well as companies owned by local government units.