IMF issues a brighter economic forecast for Croatia than it did six months ago.
On Tuesday, the International Monetary Fund (IMF) increased its estimate of growth of the Croatian economy to 0.8 percent, at the same time lowering its estimates of unemployment levels for this and next year, reports Jutarnji List on October 7, 2015.
In its regular autumn forecast for the world economy, the IMF now estimates that the growth of the Croatian economy this year will be 0.8 percent, which is 0.3 percentage points higher than it had forecast in April, in its regular spring outlook. Forecast for the next year was confirmed at one percent.
The IMF has also significantly lowered forecasts for the unemployment rate in Croatia for this year and next. For this year, it predicts unemployment rate of 16.6 percent, compared to the spring forecast of 17.3 percent. In the next year, the unemployment should slip to 16.1 percent, which is 0.8 percentage points less than the IMF predicted in the spring.
The inflation forecast for Croatia has also been updated. The IMF now predicts a slightly smaller decrease in consumer prices this year, by 0.4 percent, while in April the expected decline stood at 0.9 percent. In the next year, the prices should start rising again, by 1.1 percent, which is 0.2 percentage points more than the IMF predicted in spring.
After the growth of Croatian gross domestic product in the first and second quarters by 0.5 and 1.2 percent respectively, other financial institutions have also updated their economic growth forecasts in recent months. The Croatian National Bank now expects that the Croatian GDP will grow this year by 0.5 percent, while in 2016 it expects acceleration of economic growth to 0.9 percent. The Economics Institute estimates that this year the economic growth could be 0.5 percent, and that the rate of GDP growth will be above one percent in 2016. Hypo Alpe Adria Bank has revised upward its earlier estimate of economic growth from 0.5 to 1 percent, while Raiffeisen believes that in 2016 Croatia should be able to double the pace of GDP growth, from 0.5 percent to 1 percent.
During the recent budget review, the government has raised its estimate of this year’s GDP growth from 0.5 to 1.1 percent.