VIDEO: Croatia’s State of the Nation address: What Plenković announced

Croatian Prime Minister Andrej Plenković has addressed the Croatian Parliament on Tuesday as part of his annual State of the Nation speech, reviewing the government’s record, key policy priorities and the country’s economic progress.

He announced during the speech that Croatia’s economy is expected to surpass €100 billion for the first time this year, while pensioners are set to receive a higher annual supplement in December.

Presenting his government’s annual report, Plenković said the country’s gross domestic product (GDP) was projected to grow by 2.2% in 2026, followed by 2.3% in 2027, citing International Monetary Fund forecasts.

He said Croatia was among the European Union’s four fastest-growing economies over the 2025–2027 period. GDP has more than doubled in nominal terms over the past decade, rising from €47 billion to a projected level above €100 billion.

Plenković also said the public debt-to-GDP ratio had fallen by almost 30 percentage points over five years and was expected to reach approximately 55.5%.

Pension supplement to increase

The annual supplement for pensioners will rise to €7 per year of pensionable service this December, compared with €6 last year, Plenković announced.

The payment is expected to average €208 per pensioner, with €258 million allocated for the measure.

The prime minister said the average monthly pension currently stood at €764, or €780 when the annual supplement was included. The government’s target is to raise the average pension to €800 by 2028.

From 1 January 2027, pensions will also be exempt from personal income tax, he said.

Higher support for newborns

The one-off payment for each newborn child will increase from €618 to €800 next year, with the government aiming to raise it further to €1,000 by 2028.

Plenković said more than 1,000 additional children had been born this year compared with the same period last year.

He added that more than 95% of parents receiving parental leave benefits during the first six months were paid their full salary.

The government is building or renovating 900 kindergartens, with the stated goal of ensuring every child has access to a kindergarten place by 2030.

Plenković said Croatia had recorded a net positive balance of almost €22 billion from the EU budget since joining the bloc.

He also reported that 404 of 406 milestones under Croatia’s National Recovery and Resilience Plan had been fully completed on time, representing 99.5% of the total. Work on the remaining two partially completed milestones is continuing.

Defence spending is expected to increase from the current 2.06% of GDP to 3% by 2030. The government’s longer-term ambition is to reach 5% for defence and related investment by 2035.

Plenković cited ongoing military modernisation, including the acquisition of Rafale fighter jets, Black Hawk helicopters, Bayraktar drones, Bradley fighting vehicles and Patria armoured vehicles. Procurement of Leopard tanks, artillery, rocket systems and counter-drone equipment is also under way.

He reiterated Croatia’s support for Ukraine and EU enlargement, subject to candidate countries meeting the required criteria.

The prime minister also identified Bosnia and Herzegovina’s European integration and the position of Croats living there as continuing foreign policy priorities. He said annual funding for Croats outside Croatia had increased from €16 million to €203 million.

Speech starts at around 2 hr 28 min mark.