Croatia Economic Forecast

Croatia Economic Outlook

January 8, 2019

A solid third-quarter outturn was buoyed by upbeat domestic demand; economic growth landed near Consensus and roughly in line with the expansion a quarter earlier. A tight labor market underpinned household spending, as did low inflation. Fixed investment, meanwhile, accelerated on absorption of EU-linked structural funding and despite the fall-off in industrial metrics. On the external front, a pullback in export growth was par for the course amid the broader European slowdown. Looking ahead, available fourth-quarter data has mostly been positive, with upbeat retail sales in October and economic sentiment through November. An uptick in the unemployment rate and sluggish industrial output in recent months, however, are likely to bruise year-end gains.

Croatia Economic Growth

Lower unemployment and higher wages should keep household spending in the driver’s seat next year, as should stronger remittance inflows. Meanwhile, still-low borrowing costs and higher absorption of EU-tied structural funding are poised to boost fixed investment. External-sector risks have grown in recent months, however, and a pullback in global trade would likely chill exports. Furthermore, tourism will remain vulnerable to competition from other Mediterranean destinations. Met the why particular analysts expect growth of 2.7% in 2019, unchanged from last month’s forecast, and 2.5% in 2020.

Croatia Economy Data

Population (million)
GDP per capita (EUR)11,33811,38211,70411,27111,811
GDP (EUR bn)
Economic Growth (GDP, annual variation in %)-0.5-
Consumption (annual variation in %)-1.9-
Investment (annual variation in %)1.4-
Industrial Production (annual variation in %)-
Retail Sales (annual variation in %)-
Unemployment Rate21.519.417.614.712.2
Fiscal Balance (% of GDP)-5.3-5.1-3.4-0.90.8
Public Debt (% of GDP)80.584.083.880.678.0
Money (annual variation in %)11.59.611.418.219.1
Inflation Rate (CPI, annual variation in %, eop)0.3-0.5-0.60.2-  
Inflation Rate (HICP, annual variation in %)2.30.2-0.3-0.61.3
Inflation (PPI, annual variation in %)-0.2-2.5-3.7-4.32.0
Policy Interest Rate (%)
Stock Market (annual variation in %)3.1-3.1-2.818.1-7.6
Exchange Rate (vs EUR)7.627.667.647.557.43
Exchange Rate (vs EUR, aop)7.587.637.617.537.46
Current Account (% of GDP)
Current Account Balance (EUR bn)
Trade Balance (EUR billion)-6.6-6.5-7.0-7.3-8.2
Exports (EUR billion)8.99.411.211.511.7
Imports (EUR billion)15.516.017.217.919.8
Exports (annual variation in %)
Imports (annual variation in %)
International Reserves (EUR)12.912.713.713.515.7
External Debt (% of GDP)11511611188.682.6

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Croatia Facts

Bond Yield2.140.0 %Jan 21
Exchange Rate6.53-0.54 %Jan 21
Stock Market1,762-0.48 %Jan 21

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