Croatian Economic Analyst Damir Novotny Talks Inflation Expectations

Lauren Simmonds

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As Poslovni Dnevnik writes, we recently wrote about the IMF predicting Croatia’s GDP growth to stand at 2.7 percent this year, which is significantly  less than was predicted back in the autumn forecasts.

Croatian economic analyst Damir Novotny explained to HRT that the Croatian economy did grow last year, making up for the loss of 8 and something percent. He noted that economists see these changes in GDP as an aggregate state, but when it comes to how it will affect a certain strata of society, only time will tell.

“Some will lose, some will gain because, when it comes to inflation, there’s a redistribution of economic resources and it’s a special tax that isn’t declared, but it is still a tax. That said, inflation is still relatively low and we can’t say that hyperinflation is a current threat to Croatia, although there is always a danger,” Croatian economic analyst Damir Novotny said.

“Lower growth forecasts and what is even more important – the uncertainty that this time brings means less demand for loans, and loans are still the most important source of income for banks,” said Zdenko Adrovic.

Croatia as a Eurozone member

He also noted that Croatian banks will unfortunately worsen their lending conditions because they are threatened by the growth of bad or non-performing loans, so banks need to insure themselves in some way. As for interest rates, the director of the Croatian Association of Banks, Zdenko Adrovic, expects growth, but not in a sudden sense.

Economic analyst Hrvoje Stojic believes that inflation will reach its maximum in the autumn, especially across the Eurozone, and in this country, this wave will be delayed and will be moved towards the second half of the year.

As for the introduction of the euro in Croatia, it is a political decision more than anything else. Croatian economic analyst Damir Novotny believes that in January 2023, Croatia will be a member of the Eurozone. He also thinks that it will be useful because at this time it would represent a new umbrella that can protect the country from major shocks, so people shouldn’t be afraid of that.

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