![Andrej Plenkovic](/index.php/sites/default/files/styles/large/public/2020-06/Croatian%20Prime%20Minister%20Andrej%20Plenkovic.jpg?itok=-4QJCBX3)
ZAGREB (Reuters) - Croatia said on Thursday it would widen the scope of financial support for its economy, allowing a shortening of the working week for some hard-hit firms, to soften the blow from the COVID-19 crisis.
Since the outbreak of the novel coronavirus in March the government has pumped in 7.6 billion Croatian kuna ($1.13 billion) to support salaries in companies in trouble.
The new support measure will enable hard-hit firms employing more then 10 workers to shorten the working week with financial assistance from the government, Prime Minister Andrej Plenkovic told the cabinet.
“This is the first stronger measure after those adopted over the past three months to preserve jobs and strengthen liquidity,” he said, adding that the measure would stay in force until the end of the year.
The government has estimated the measure will cost state coffers around 3 billion kuna.
It had earlier said it would need about 70 billion kuna over the next few months to finance the measures it undertakes to combat the economic crisis caused by the pandemic.
Croatia, which has run budget surpluses in the last three years, now expects a budget deficit of 6.8% of gross domestic product (GDP) in 2020, and a reduction below 3% of GDP in 2021.
The economy is forecast to shrink by 9.4% this year because of the coronavirus impact. At the end of last year, authorities had projected growth of 2.5% in 2020, after expanding by 2.9% in 2019.
So far, Croatia has registered 2,388 coronavirus infections and 170 deaths from the respiratory disease.