Croatia’s GDP Grows Up to 2.5% After Joining the EU

Following its accession to the European Union in July 2013, Croatia can expect a growth in gross domestic product (GDP) of up to 2.5% in the medium term, thanks to access to the common European market and funds from EU sources, analysts from Erste Group forecast.

After Croatia’s entry into the EU in July next year, we expect that from 2014 to 2020, the growth of Croatian GDP will be up to 2.5%, thanks to access to the EU common market and EU fund resources – predicts Fritz Mostboeck, head of the analysis department at Erste Group, in an analysis of trends and milestones in 2013 titled ‘Is the number ’13’ a lucky number for the economy?’.

Croatia will become the 28th member of the EU in July 2013, thus concluding negotiations that began in 2005, Erste Group reminds.

– Although the benefits of EU membership may seem somewhat less attractive compared to the last two waves of EU enlargement, we forecast that the medium-term prospects for the growth of the Croatian economy will be supported by access to the common market and EU fund resources – said Mostboeck.

As he added, the integration of the Balkans into the EU will receive an additional boost during 2013 when Serbia is expected to receive a date for the start of negotiations for EU accession, thereby confirming its strong orientation towards the EU and supporting structural reforms in the medium term.

Speaking about global austerity measures, Mostboeck notes that the necessary austerity measures being implemented by governments worldwide will hinder the economy in 2013 from returning to a period of booming activity.

– Ongoing conflicts in the Middle East will put pressure on financial markets at least temporarily, and on oil and commodity prices over a longer period. In the U.S., asset purchase programs by the Federal Reserve should improve consumer confidence and stimulate consumption in 2013. This will generally lead to an unchanged growth rate of two percent in 2013 and to a gradual acceleration of growth in 2014, which will provide the necessary boost to global growth, particularly exports in the eurozone. Measures by the European Central Bank (ECB) have improved the atmosphere in financial markets – states among other things in the main highlights of the latest analysis by this Austrian banking group.