The Economist’s forecast is significantly lower than the government’s.
British weekly The Economist expects that Croatian economy will grow by 2.2 percent in 2017 and that the growth will be boosted by strengthening consumer confidence, reports Poslovni.hr on December 2, 2016.
As pointed out by analysts of The Economist in the special issue “The World in 2017”, the consumer confidence will support moderate growth, but the economy will remain below its peak which was achieved in 2007 and 2008. Inflation in Croatia in the next year is estimated at 0.7 percent, while the budget deficit is expected to reach 2.1 percent of GDP.
HDZ’s Andrej Plenković became the Prime Minister in a new centre-right coalition government after the elections in the second half of 2016, says The Economist. “It seems that the new government will be more stable than the previous one, with a strong focus on economic policies and weak support for advanced right nationalist agenda”, said the analysts of The Economist.
The Economist’s forecast of the growth of Croatian GDP is markedly lower than most other estimates, including the government’s.
The European Commission in its recent forecast reported that in 2017 it expected growth of the Croatian economy by 2.5 percent. The same rate of growth is expected by the Croatian National Bank, while the Institute of Economics in Zagreb estimates that the GDP growth will reach 2.7 percent. Even more optimistic is the Addiko Bank, which this week, after the data on the acceleration of economic growth in the third quarter of this year to 2.9 percent was announced, which is the fastest growth in the past eight years, increased its estimate of GDP growth in the next year from the previous 2.2 percent to 2.8 percent.
However, the government is the most optimistic of them all. In its recent budgetary guidelines for the next year, it estimated that the economy would grow by 3.2 percent. This is the growth rate on which the government will base its proposal of the 2017 state budget. If it turns out that the government was too optimistic in its forecast, budget revenues will fall below expectations which would mean that either the budget deficit would be higher than planned or the government would have to proposed a budget review and cut spending mid-year.
Analysts of The Economist expect economic growth of 1.9 percent in Eastern Europe and 1.1 percent in Western Europe. The fastest growth will be in Asian countries excluding Japan, by 5.2 percent, while the countries of North America are expected to grow by 2.3 percent.
