(ANSA) - ZAGREB - The Croatian government has announced its budget law for 2014, which envisages another very difficult year for national public finances, with cuts and savings in all areas, but this will not be enough to reduce the country's deficit, which is expected to reach 5% of GDP.

Finance Minister Slavko Linic explained that the ratio between tax revenues and state expenditures, that is 2.3 billion, so far the highest in the history of Croatia, cannot be avoided, considering the rising interest rates the State has to pay on its foreign debt. ''Nearly the whole of deficit will be spent to pay off old debts and interests'', said the minister, announcing that Croatia will not only exceed the 3% threshold within debt to GDP ratio, but will also be in breach of the 60% limit for government borrowing. ''It will be possibile to contain our deficit, but now debt is worryingly high'' the minister said, announcing that the government intends to continue with privatisations, considering this strategy the only way to make some cash. The state budget has been calculated by forecasting a GDP at 1,3% in 2014, while during the following year, in Zagreb a real economic recovery is expected, 2.2%, and then 2.5% in 2016.(ANSA).