It seems that the European Commission does not share the optimism of the Croatian government.
The European Commission has lowered its estimate of growth of the Croatian economy for this year from 2.1 to 1.8 percent, which shows that it does not share the optimism of Prime Minister Tihomir Orešković and his government, reports Večernji List on May 3, 2016.
In February, the European Commission believed that Croatia’s GDP would grow 2.1 percent this year, but three months later it corrected its own forecast downward. The Commission now believes that the growth of 2.1 percent will be achieved next year. Also, in its latest forecast, the European Commission does not expect Prime Minister Orešković will be able to “crack down” on the public debt this year. The EC believes that the public debt will increase slightly this year and stabilize next year.
On the positive side, the Commission expects investments to continue to grow, and the overall trends in the economy and GDP growth should lead to an increase in employment by one percent this year. Last year, the employment grew by 1.7 percent. Accordingly, it is expected that the unemployment rate will decrease by about one percentage point. Prices will this year continue to be subject to deflationary pressures, and the Commission believes that Croatia will lower the fiscal deficit to 2.7 percent, after a strong adjustment from last year.
The Commission estimates that the eurozone will this year grow moderately at a rate of 1.6 percent, while the average growth of all EU member states will be 1.8 percent.