EC: Due to Rapid Recovery, Croatia Receives Less Funding

Croatia will receive less funding from the Recovery and Resilience Facility (RRF) due to its rapid recovery from the consequences of the coronavirus crisis, according to the updated allocation key for grants to member states published by the European Commission on Thursday.

The Commission published a table indicating that Croatia will receive just over 5.5 billion euros in grants from the RRF, while earlier projections estimated 6.3 billion euros.

The allocation key for 70 percent of the national allocation of grants was based on the population, GDP per capita relative to the EU average, and the average unemployment rate during the period 2015-2019 compared to the Union average. For the remaining 30 percent, the real decline in GDP during the pandemic in 2020 and the overall economic activity trends during the period 2020-2021 were taken into account.

According to the new key, the difference between the estimated GDP growth in the autumn economic forecast for 2020, which was the most recent available economic forecast at the time of the Regulation’s adoption, and the updated data based on the actual GDP trends during the period 2020-2021 was considered.

This resulted in countries that recovered faster than expected according to the autumn economic forecasts for 2020 receiving slightly less, while those with slower recoveries received slightly more funding.

According to provisional data for Croatia published by Eurostat, the Croatian economy fell by 8.1 percent in 2020 but quickly recovered, recording a GDP growth of 10.2 percent in 2021, meaning that the economy had already surpassed pre-coronavirus crisis levels last year, while the Commission expected this to happen only in 2022.

In the autumn economic forecasts published on November 5, 2020, which served as the basis for the first calculation of national allocations, the Commission estimated that the Croatian economy would decline by 9.6 percent that year, record a growth of 5.7 percent in 2021, and a growth of 3.7 percent in 2022.