Preparations for the most exciting economic day of the year, the traditional Lider event Day of Big Plans, which will take place on September 18 in Zagreb, are in full swing. The importance of such a gathering for the leaders of the domestic economy is increasing as the challenges they face are unfortunately still abundant. Although inflation, which resulted in a significant spike in material prices, has been somewhat contained, and central banks are announcing a reduction in capital costs, this does not mean that the macroeconomic environment offers ‘smooth sailing.’ The manufacturing industry is still recovering from supply chain disruptions, and geopolitical risks in the world that threaten to destabilize entire regions are even greater than a year ago. Moreover, the labor shortage is no longer acute but a chronic problem for the economy.
In this context, Lider’s Day of Big Plans will certainly, as every year, provide interesting insights into the current economic situation and forecasts for the coming year from the perspective of the leaders of the most important domestic companies. Macroeconomic forecasts will be provided by interesting foreign economists, one of whom is Mauro Giorgio Marrano, a senior economist at the Italian bank UniCredit for the Central and Eastern Europe region. Marrano will provide an overview of ‘our’ Central and Eastern European area in a presentation titled ‘Macroeconomic Forecasts for 2025.’
In 2025, growth of 2.9 percent
Unlike the western part of the European Union, the eastern part has so far been able to boast higher economic growth rates. Forecasts indicate that this trend will continue. Marrano expects that the economies in EU-SIE (Bulgaria, Croatia, Czech Republic, Hungary, Poland, Romania, Slovakia, and Slovenia) will grow by 2.7 percent in 2024 and 2.9 percent in 2025, with Croatia being among the best with a growth rate of 3.2 and 3.3 percent, along with growth in the economies of the Western Balkans of around three percent. – Private consumption is likely to remain the largest driver of growth, and private investments (including residential construction) could recover in 2025 as interest rates decrease. Public investments are also likely to support growth in countries where governments manage to attract money from the EU – assesses Marrano.
In his opinion, Croatia will be among the leaders in that group of countries. – Croatia is one of the most successful countries in attracting EU funds and is likely to be among the best in the region in terms of economic growth in 2025 – says the UniCredit economist. Looking at a slightly longer term, Marrano emphasizes that he expects the continuation of economic convergence in the region in the medium term. – Investments are likely to play an increasingly important role; however, most countries in the region risk facing the so-called ‘middle-income trap,’ where innovation and productivity do not improve sufficiently for these countries to compete with the most developed countries. Additionally, unfavorable demographic trends are likely to limit labor’s contribution to growth, posing a barrier to maintaining economic convergence at a similar pace as in the last two decades. Therefore, besides the role of foreign direct investments and EU funds, productivity growth is crucial for improving the prospects for potential growth in the region. Avoiding this risk requires significant investments in research and development and, in this regard, in educational systems – believes Marrano.
