IMF Raises Croatian Economy’s Growth Projection for 2021, 2022

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In April’s outlook, the IMF projected that Croatia’s economy would grow 4.7% this year and 5% in 2022, while last month, at the end of regular consultations with member states, its Mission projected a 5.4% growth for this year and 5.8% for 2022.

According to the latest report, the estimate of the Croatian economy’s contraction in 2020 was lowered to 8%, one percentage points less than projected last spring.

Significantly lower deficit

The current account deficit is projected at 0.1% of GDP, down 2.2 pp than projected last spring. Next year the deficit is projected at 0.8%, half as much as the deficit projected last spring. The 2020 deficit is estimated at 0.4%, down from the 3.5% estimated last spring.

In a concluding statement after last month’s consultations, the IMF Mission said the balance of payments indicators were relatively good, despite a strong decrease in tourism revenue.

Higher inflation, lower unemployment

Annual inflation projections for this year and the next have been raised to 2%, up 1.3 and 0.8 pp respectively than those projected last spring.

The 2020 inflation is estimated at 0.1%, down 0.2 pp from last spring’s estimate.

Commenting on inflation in September’s concluding statement, the IMF Mission said that despite a recent acceleration, it remained low, projecting that it would stabilise in 2023 at 2%.

In the latest projections, the unemployment rates for this year and the next have been lowered by 1 pp to 8.4% in 2021 and 8% in 2022.

For 2020, it is estimated at 9%, down 0.2 pp than in last spring’s projections.


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