August the 27th, 2025 – The Croatian annual GDP growth rate could jump to 3.3%, with the success of the ongoing summer tourist season clearly felt.
As Jadranka Dozan/Poslovni Dnevnik writes, a series of monthly economic indicators for the second quarter of this year point to an acceleration in the pace of economic activity in Croatia. That’s the case both on a quarterly and on an annual level. State statisticians will publish a synthetic statement of economic dynamics through GDP growth today, and expectations are that after 2.9% growth in real terms during the first quarter, the annual rate in the second will exceed 3%. This is also indicated by the CEIZ index of the Zagreb Institute of Economics.
According to this business cycle indicator, its values for April, May and June suggest that the Croatian annual GDP growth rate in the second quarter of this year stand at 3.3%, EIZ analysts pointed out.
marked acceleration
The commentary accompanying the latest index values emphasises that in terms of monthly comparisons, Croatian annual GDP growth in June is the result of a higher number of tourist arrivals, an increase in State Budget revenues from VAT and stronger retail trade turnover. In addition, all components of the index achieved an increase in value compared to June 2024.
The Croatian National Bank (CNB) has already stated that high-frequency indicators for the second quarter point to a significant acceleration in current economic activity after stagnation at the beginning of the year. Real GDP in the second quarter could increase by 1.2% compared to the first, and on an annual basis, growth could accelerate from 2.9% to 3%.
The CNB analysts referred to the growth in the construction work volume index (in April, when it was 2.2% higher than the average for the previous quarter), as well as the acceleration in the growth of real retail trade turnover, which was dampened by the boycott of retail chains in the first quarter. The continued strong growth in real compensation of employees and the high level of the consumer confidence index are in favour of continued strong personal consumption.
The CNB also stated that the relatively weak physical indicators for tourism during May can largely be linked to the later holidays this year. This was indicated by the June trends, when the number of foreign tourist arrivals increased by 11.4% and the number of overnight stays by almost 14% compared to the same period last year. In this regard, they added that cumulatively, from the beginning of the year to the end of June, the number of tourist overnight stays increased by four, and in the second quarter by 5.7%.
an increase in the value of goods
Regarding the volume of industrial production, which in April and May was lower by 1% compared to the first quarter of this year, they noted that this decline was entirely the result of a decrease in the usually fluctuating segment of production and supply of electricity and gas. Production in the manufacturing industry on the other hand was 1.3% higher compared to the first quarter.
In the meantime, the picture of the second quarter in terms of monthly indicators is more or less complete. In the case of June, the year-on-year growth in retail trade turnover accelerated (compared to last June, it was 7.5% higher in real terms), as was the value of goods exports. According to the CBS estimate, that reached 6.3% of nominal growth in the first six months (from 5.7% in the first five months). All in all, Croatia will probably conclude the second quarter, and the first half of the year, with real GDP growth of slightly more than 3%. Only five EU countries, three of which are Eurozone members, recorded such a growth rate in the second quarter.
According to the first results taken from across the EU, compared to the second quarter of last year, economic growth amounted to 1.5% in real terms, while at the Eurozone level, it totalled 1.4%. Croatia is therefore still experiencing a significantly higher growth rate, although the aforementioned achievements at the EU level are better than initial expectations (which were calculated at 1.2%). This was interpreted as confirmation that companies are adapting to trade uncertainties, thereby potentially reducing the need for further reductions in interest rates by the European Central Bank in order to stimulate the EU’s economies.
And at the level of the whole of 2025, it’s clear who will be near the top of the EU ranking in terms of Croatian annual GDP growth. Currently, analysts’ forecasts mostly stand at around 3%, with the range of expectations according to the consensus of forecasts periodically collected by companies such as FocusEconomics, ranging from around 2.5% to 3.5%. The government, on the other hand, still stands by its projection of the Croatian annual GDP growth rate being 3.3% for this year. This means that they don’t really expect a slowdown in the second half of the year.
a realistic projection from the government
Special adviser to the Prime Minister Zvonimir Savić believes that the government’s projection is realistic. Emphasising that Croatia continues to grow at rates two or three times higher than the EU average. He also noted that this means that Croatia is getting closer to the limit of 80 percent of the average EU level of development. From 77% last year, the country could conclude this year at around 79% of the average development of the entire EU. He also emphasised that the second quarter of this year will also be the 18th quarter of consecutive positive annual GDP growth rates.
personal demand and consumption lead the way
Zrinka Živković Matijević, chief economist at Raiffeisen Bank, revealed that so far there have been no significant changes in the main drivers of economic growth. This is still domestic demand, and above all personal consumption, which is still influenced by a strong labour market, real wage growth and employment growth. There is also solid investment growth on the wings of the still generous inflows of EU cash (especially with regard to the national recovery and resilience plan). On the other hand, real investment growth is slowing down, partly due to the base effect.
Seen through the prism of gross value added, she explained, a slightly positive contribution from both construction and the manufacturing sector is expected. Looking a little more broadly, it’s important to keep in mind the potential growth rate of the Croatian economy and to increase the focus on structural indicators. Although progress is being made here too, for sustainable growth it’s going to be necessary to improve cost competitiveness and productivity, according to the RBA economist. Above all, she concluded, more even growth across Croatia should be among the priorities, because today it largely relies on tourism and very little else.
