Analysts of the Italian Intesa SanPaolo bank have raised the estimated growth of Croatian economy in 2016 to a solid 1.8% and do not expect the political instability and early elections in September to jeopardise short term economic forecast
In comparison, in December of 2015 they expected the growth rate of the Croatian GDP to be 1%, HINA reported on July 4, 2016.
“A stronger than expected economy growth in the first trimester, 2.7% annually, the continuation of positive macroeconomic trends, such as growth of production industry in April by 5% and retail sales by 3.2% annually, have strengthened our opinion that the economy will achieve a solid growth rate of 1.8% in 2016,” the latest report by Intesa SanPaolo states, owners of Privredna Banka Zagreb.
“Despite political instability, meaning the no-confidence vote for PM Tihomir Orešković followed by a parliament dissolution on July 15, leading to early elections in September, we do not expect the economic forecast to be threatened,” analysts estimated.
However, they do note another weak coalition government could lead to another lost year in terms of structural reforms, which could question medium and long term economic forecast of the nation.
Regarding Brexit, Intesa does not expect any direct negative effect on the trade with Britain, amounting to under two percent in total Croatia trade.
Arrivals of tourists from Britain make up 4% of total arrivals, but Intesa does not expect any radical or quick changes in British consumer habits.