The Croatian economy is expected to weaken by 0.6 percent this year, while it could grow by 1.5 percent next year, according to the International Monetary Fund (IMF) in its regular autumn forecasts. In April, the IMF projected a 0.2 percent decline in the economy.
The growth estimate of 1.5 percent for next year remains unchanged.
The average inflation rate in Croatia is expected to be 3.0 percent this year, which means the IMF has lowered its April forecast of 3.2 percent inflation. The inflation forecast for 2014 has been raised from 2.3 to 2.5 percent. The current account balance is expected to show a surplus of 0.4 percent of GDP this year, while in April the IMF anticipated a balanced account. For 2014, the IMF now expects a deficit of 0.7 percent of GDP, compared to the previously projected deficit of 0.5 percent of GDP.
The unemployment rate estimate in Croatia has been significantly raised this year to 16.6 percent, up from the 15.2 percent projected in April. Next year, the unemployment rate, according to the latest IMF estimates, is expected to be 16.1 percent, which is also significantly higher than the 14.7 percent projected in April. The IMF has lowered its estimate for global economic growth this year to 2.9 percent, down from the 3.2 percent projected in the updated July forecasts. Next year, growth is expected to be 3.6 percent, which is 0.2 percentage points lower than the IMF estimated in July. Economic activity in the eurozone is expected to decrease by 0.4 percent this year, while in July the IMF anticipated a decline of 0.3 percent. The growth estimate for that bloc’s economy for next year remains unchanged at 1.0 percent.
