Croatia is expected to record a decline in gross domestic product (GDP) between 5 and 6 percent this year, while next year it will have a modest growth of around 1.5 percent, forecasted the European Bank for Reconstruction and Development (EBRD) while presenting the Transition Report for 2009 today in Zagreb.
For the entire region of Central and Eastern Europe, the EBRD predicts a decline in economic activity of 6.3 percent this year, followed by a modest recovery next year averaging 2.5 percent. The largest investor in the Central and Eastern European region emphasizes that the region is still in crisis and has been more severely affected by the economic crisis than other regions, such as more developed economies where a decline in economic activity of 3.4 percent is expected this year, Latin America where a decline of 2.5 percent is anticipated, or developing Asian countries where a growth of 1.5 percent is expected.
"It is still possible that some indicators in the region, such as unemployment or the number of non-performing loans, may worsen before they improve," said Peter Sanfey, chief economist of the EBRD. This year has been a year of some disappointments and delays for Croatia; for example, there has been little progress in the privatization process, especially of shipyards, and in the first half of the year, there was a slowdown in the process of joining the European Union, noted Sanfey. However, he highlighted the financial sector as a positive element that has weathered the crisis well, thanks in part to the prudent policies of the central bank.
