Croatia Economic Forecast

Croatia Economic Outlook

July 31, 2018

Sequential data indicates that robust economic activity continued through Q2, following a solid performance in Q1 that was largely driven by buoyant domestic demand. Retail sales grew at nearly double the pace on average in April–May compared to in the first quarter, propelled by healthy gains in real wages and a strong labor market. The unemployment rate fell below 11% for the first time on record in May and declined further in June. Coupled with a sturdy increase of tourist arrivals in the same period, mainly from Austria and Germany, this signaled another robust expansion for private consumption in the quarter. Meanwhile, creditors of the highly-indebted food and retail giant Agrokor voted to approve a debt settlement deal in early July, whereby Russian state banks would acquire a nearly 50% equity stake of the new creditor-owned company—averting the bankruptcy of Croatia’s largest private employer. In the same month, Fitch Ratings upgraded the country’s credit rating outlook to positive from stable due to the strong fiscal metrics and current account surplus, boding well for increased foreign investment inflows.

Croatia Economic Growth

Economic growth should remain robust this year, underpinned by a booming tourism sector, which available data points to a new record-breaking season for arrivals this year, and healthy consumer spending on the back of rising household real incomes and falling unemployment. The national football team’s successful FIFA World Cup campaign is also likely to have provided a boost to personal spending during the summer months. Met the why particular panelists project GDP growth of 2.7% in 2018, unchanged from last month’s forecast, and 2.7% again in 2019.

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 Yield2.170.0 %Aug 07
Exchange Rate6.11-0.54 %Aug 07
Stock Market1,838-0.48 %Aug 07

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