IMF Confirms Croatia's 2.6% Growth Forecast for 2019

By 10 April 2019

ZAGREB, April 10, 2019 - Croatia's economic growth will slow down mildly in 2019 and 2020, the International Monetary Fund (IMF) said in its spring forecast confirming Croatia's GDP growth forecast however, it significantly changed its forecast of unemployment.

Croatia's economy this year is expected to increase by 2.6%, which was also forecast in the IMF's World Economic Outlook last autumn. According to its forecast for 2020, Croatia's growth will decelerate slightly to 2.5%.

IMF's forecast to 2018 however has been downgraded by 0.1 percentage points to 2.7%, with Croatia recording four years of growth in a row.

IMF significantly upgraded its forecast of Croatia's unemployment, noting that in 2018 unemployment decreased to 10% from 12.4% in 2017.

Unemployment is expected to continue to fall to 9% this year, reducing the autumn projection by 2.2 percentage points. That would mean that it would remain above the average eurozone forecast of 8%.

The IMF expects Croatia's unemployment rate to continue falling in 2020 by one percentage point to 8%. That would mean that it would be somewhat higher than the 7.7% forecast for the eurozone and above the 6.9% projected for the group of developed European economies.

The inflation rate for 2018 was mildly decelerated by 0.1 percentage point compared to the autumn outlook to 1.5% whereas for 2019 consumer prices are projected to rise at that same rate as projected in the autumn outlook.

In 2020, inflation is expected to be somewhat higher at 1.6% similar to the outlook for developed European economies and the eurozone with the exception of Slovenia.

The latest forecast of Croatia's current account balance surplus for 2018 is slightly higher (0.2 pp) to 2.9% of GDP. The forecast of the current account balance surplus for 2019 however is 2.2 pp less to 2.1% of GDP.

The surplus is expected to continue sliding in 2020 to 1.6% of GDP.

More news about Croatia’s economic growth can be found in the Business section.