Croatia Economic Forecast

Croatia Economic Outlook

February 6, 2018

Recent data suggests that economic activity cooled somewhat in the final quarter from the third one. In December, the unemployment rate increased for the third consecutive month, mainly due to seasonal factors, and the annual contraction in industrial production sharpened. However, retail sales expanded healthily throughout the quarter. On 12 January, Fitch Ratings upgraded Croatia’s credit rating from BB to BB+, citing the robust cyclical position and the improvement in public finances as reasons for the upgrade. In mid-January, the IMF concluded its annual Article VI consultation with Croatia. The Fund praised the country’s favorable fiscal performance and conservative prudential policies. However, it also stressed the need for the government to cut public sector wages and social benefits, as well as the need to liberalize the labor market, streamline public administration and privatize SOEs.

Croatia Economic Growth

Growth is projected to decelerate slightly this year, as the expansion in the tourism sector moderates, restraining private consumption growth. On the other hand, growth in fixed investment should speed up thanks to accommodative financing conditions and stronger EU fund inflows. Moreover, the government’s prudent fiscal stance will maintain the debt-to-GDP ratio on a downward trend. The main downside risks stem from the Agrokor restructuring process, which could hurt banks’ balance sheets and the company’s providers, weighing on credit growth and investment. Met the why particular panelists project GDP growth of 2.8% in 2018, unchanged from last month, and 2.7% in 2019.

Croatia Economy Data

Population (million)
GDP per capita (EUR)11,30911,33811,14611,46611,031
GDP (EUR bn)
Economic Growth (GDP, annual variation in %)-2.2-1.1-
Consumption (annual variation in %)-3.0-1.9-
Investment (annual variation in %)-3.31.4-
Industrial Production (annual variation in %)-5.4-
Retail Sales (annual variation in %)-4.2-
Unemployment Rate20.921.619.617.214.8
Fiscal Balance (% of GDP)-5.3-5.3-5.4-3.4-0.8
Public Debt (% of GDP)70.782.286.686.784.2
Money (annual variation in %)0.911.59.611.418.1
Inflation Rate (CPI, annual variation in %, eop)4.70.3-0.5-0.60.2
Inflation Rate (HICP, annual variation in %)
Inflation (PPI, annual variation in %)5.4-0.2-2.5-3.7-4.3
Policy Interest Rate (%)
Stock Market (annual variation in %)0.03.1-3.1-2.818.1
Exchange Rate (vs EUR)7.557.627.667.647.55
Exchange Rate (vs EUR, aop)7.517.587.637.617.53
Current Account (% of GDP)-
Current Account Balance (EUR bn)
Trade Balance (EUR billion)-6.6-6.9-6.8-7.0-7.4
Exports (EUR billion)9.69.611.411.512.3
Imports (EUR billion)16.216.517.118.519.7
Exports (annual variation in %)0.5-
Imports (annual variation in %)-
International Reserves (EUR)11.212.912.713.713.5
External Debt (% of GDP)13614313111395.5

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Croatia Facts

Bond Yield2.090.0 %Feb 20
Exchange Rate6.03-0.54 %Feb 20
Stock Market1,855-0.48 %Feb 20

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