Croatia Economic Forecast

Croatia Economic Outlook

May 8, 2018

Recent indicators show signs of a recovery in the first quarter, following a weak economic performance in the last quarter of 2017. Although industrial production growth posted only marginal gains in Q1, this marked an improvement from a near-stagnant showing in Q4. Furthermore, tourist arrivals grew at a double-digit pace in January–February, signaling a continuation of the sector’s stellar performance last year. In addition, robust retail sales in Q4 largely carried over into Q1, which, alongside falling unemployment and healthy real wage growth, suggests that consumer spending was strong in the first quarter. Meanwhile, significant progress was made in the restructuring process of conglomerate Agrokor on April 11, as creditors agreed on draft settlement terms. They will vote on the final deal by July 11; Russia’s state-owned Sberbank is expected to obtain the largest equity stake.

Croatia Economic Growth

Economic growth should remain robust this year, underpinned by a dynamic tourism sector and solid household spending. Moreover, fixed investment growth is expected to accelerate on the back of higher absorption of EU structural funds. Downside risks to the outlook include, however, the possibility of a disorderly restructuring of Agrokor, although this has lessened somewhat recently, and a slowdown of external demand if political and economic uncertainties reemerge in the EU. Met the why particular panelists project GDP growth of 2.7% in 2018, down 0.1 percentage points from last month´s forecast, and 2.7% again in 2019.

Croatia Economy Data

20132014201520162017
Population (million)4.34.24.24.24.2
GDP per capita (EUR)11,33811,14611,46611,031-  
GDP (EUR bn)44.043.044.046.0-  
Economic Growth (GDP, annual variation in %)-1.1-0.52.22.9-  
Consumption (annual variation in %)-1.9-1.71.03.3-  
Investment (annual variation in %)1.4-2.83.85.1-  
Industrial Production (annual variation in %)-1.61.22.45.1-  
Retail Sales (annual variation in %)-0.50.42.44.0-  
Unemployment Rate21.619.617.214.8-  
Fiscal Balance (% of GDP)-5.3-5.4-3.4-0.8-  
Public Debt (% of GDP)82.286.686.784.2-  
Money (annual variation in %)11.59.611.418.1-  
Inflation Rate (CPI, annual variation in %, eop)0.3-0.5-0.60.2-  
Inflation Rate (HICP, annual variation in %)2.30.2-0.3-0.6-  
Inflation (PPI, annual variation in %)-0.2-2.5-3.7-4.3-  
Policy Interest Rate (%)7.007.003.003.00-  
Stock Market (annual variation in %)3.1-3.1-2.818.1-  
Exchange Rate (vs EUR)7.627.667.647.55-  
Exchange Rate (vs EUR, aop)7.587.637.617.53-  
Current Account (% of GDP)1.01.94.62.7-  
Current Account Balance (EUR bn)0.40.92.11.2-  
Trade Balance (EUR billion)-6.9-6.8-7.0-7.4-  
Exports (EUR billion)9.611.411.512.3-  
Imports (EUR billion)16.517.118.519.7-  
Exports (annual variation in %)-0.48.111.26.8-  
Imports (annual variation in %)1.93.67.96.6-  
International Reserves (EUR)12.912.713.713.5-  
External Debt (% of GDP)14313111395.5-  

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Croatia Facts

ValueChangeDate
Bond Yield2.190.0 %May 21
Exchange Rate6.26-0.54 %May 21
Stock Market1,849-0.48 %May 21

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Croatia Economic News

  • Croatia: Inflation picks up to a five-month high in April

    May 16, 2018

    Consumer prices rose 0.7% from the previous month in April, accelerating slightly from March’s 0.6% rise.

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  • Croatia: Industrial production falls in March

    April 30, 2018

    Industrial output dropped 1.7% in working-day adjusted terms from the same month last year in March, contrasting the 3.3% expansion recorded in February. March’s result was driven by a sharper year-on-year contraction in the mining and quarrying sector compared to in February and a marked drop in manufacturing output following two consecutive months of expansion.

    Read more

  • Croatia: Inflation picks up in March

    April 17, 2018

    Consumer prices rose 0.6% in March compared to the previous month, contrasting the 0.1% decline observed in February.

    Read more

  • Croatia: Industrial production rebounds in February

    April 3, 2018

    Industrial output rebounded in February, growing 3.3% in working-day adjusted terms from the same month last year in February, contrasting January’s 0.4% drop, which marked the first increase in four months. February’s result was driven by healthy expansions in production in the electricity, gas, steam and air conditioning and manufacturing sectors, while the production in the mining and quarrying sector contracted heavily.

    Read more

  • Croatia: Inflation moderates further in February

    March 22, 2018

    Consumer prices dropped 0.1% in February compared to the previous month, following a sharper 0.2% fall in January.

    Read more

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