IMF Forecasts Croatia’s GDP Will Grow 1.9% in 2016

Total Croatia News

The International Monetary Fund has confirmed its expectations for Croatian economy.

The International Monetary Fund (IMF) confirmed its estimate from April, according to which Croatian economy this year should grow by 1.9 percent, which will be mildly accelerated in 2017, reports Lider on October 5, 2016.

In its autumn forecasts, the International Monetary Fund estimated that the Croatian economy this year should increase by 1.9 percent, which confirmed its forecast from the April report. In 2017, economic activity should accelerate mildly, to 2.1 percent, which is also in line with the spring forecast.

However, IMF significantly revised its estimates for inflation in this and next year. IMF now expects that prices will decrease this year by 1.0 percent, while in April it predicted positive inflation rate of 0.4 percent. For the next year, it expects an increase in inflation by 0.8 percent, while in the April report it projected inflation of 1.3 percent.

In the current report, IMF has further increased its estimate of this year’s surplus in Croatia’a current account, to 3.0 percent of GDP, compared to 2.7 percent estimated in April. In 2017, the surplus should slip to 2.2 percent.

The International Monetary Fund in its latest report confirmed the April estimates of the unemployment rate in Croatia for this and next year, 16.4 and 15.9 percent respectively. Last year, the unemployment rate stood at 16.9 percent.

While these forecasts show that the economic situation in Croatia is improving slightly, economists believe that it would take a much more significant growth rate in order for the citizens to start feeling the effects in their own wallets and for the unemployment rate to be substantially reduced.

The new government which is expected to take over in the next two weeks will have to do much more than their predecessors to accelerate growth and move Croatia closer to the European Union average. Croatia is currently second to last in the EU when it comes to the GDP per capita levels, ahead of only Bulgaria.


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