The paper explores the impact of fiscal policy on the economic growth of the Republic of Croatia. The subject of the research has been chosen because fiscal policy is the fundamental stabilizer of the business cycle's influence on the national economy and hence its impact on economic growth. The aim of the research is to determine the features of fiscal policy in the Republic of Croatia and the impact of its nature on the movement of GDP as a fundamental indicator of economic growth. The results show that fiscal policy for the Republic of Croatia has been accompanied by discretionary measures and a budget deficit accumulating the public debt of the state over the years. Fiscal discipline is therefore a priority measure in the Croatian economy which in 2017 emerged from the Excessive Deficit Procedures. However, responsible public finance management remains one of the key macroeconomic goals even after emerging from the recession period. In the primary study, the impact of basic personal deduction as tax measure and subsidies as public spending measure on GDP trends was analyzed. It has been shown that the basic personal allowance has a statistically significant impact on GDP, as it ensures an increase in personal spending. The recommendation is to increase the efficiency of the subsidy system in order to stimulate economic growth and export orientation and stimulate FDI through more effective tax framework. This recommendation stems from the fact that the net export performance in the Republic of Croatia is negative, and is a key component of GDP growth.