Croatia Economic Forecast

Croatia Economic Outlook

November 3, 2020

Following the historic GDP plunge in Q2, recent data points to a recovery in activity in Q3. The decline in industrial production continued to ease in September, recording the softest contraction in almost a year, while the unemployment rate continued to fall steadily from its over one-year high logged in May. Moreover, retail sales dropped at a markedly softer pace in Q3 than in the previous quarter, while economic sentiment showed signs of improvement overall. However, it deteriorated slightly in October amid increased pessimism in the industrial and retail trade sectors. This, together with soaring Covid-19 infections in the same month—which prompted the government to introduce tighter restrictions—could weigh on the crucial tourism industry and hinder the overall recovery in Q4.

Croatia Economic Growth

GDP is seen dropping at the sharpest pace in more than 25 years this year before rebounding solidly in 2021, on the back of reviving foreign demand and strengthening domestic activity. That said, the uncertain trajectory of the pandemic and its impact on the tourism industry, which also faces stronger competition from other destinations, poses a key risk to the outlook. FocusEconomics panelists forecast the economy to grow 5.0% in 2021, which down 0.1 percentage points from last month’s estimate, and 3.8% in 2022.

Croatia Economy Data

2015 2016 2017 2018 2019
Population (million)4.24.24.14.14.1
GDP per capita (EUR)10,69911,21811,95312,68413,276
GDP (EUR bn)45.046.849.351.953.9
Economic Growth (GDP, annual variation in %)2.43.53.12.72.9
Consumption (annual variation in %)0.23.13.23.23.6
Investment (annual variation in %)3.86.55.14.17.1
Industrial Production (annual variation in %)2.55.01.9-1.00.5
Retail Sales (annual variation in %)2.44.04.73.83.7
Unemployment Rate17.614.712.29.67.9
Fiscal Balance (% of GDP)-3.3-1.00.80.20.4
Public Debt (% of GDP)84.380.877.874.773.2
Money (annual variation in %)11.418.219.120.714.3
Inflation Rate (CPI, annual variation in %, eop)-0.60.21.20.81.4
Inflation Rate (HICP, annual variation in %)-0.3-0.61.31.60.8
Inflation (PPI, annual variation in %)-  -  -  -  -  
Policy Interest Rate (%)3.003.003.003.003.00
Stock Market (annual variation in %)-2.818.1-7.6-5.115.4
Exchange Rate (vs EUR)7.647.557.437.417.44
Exchange Rate (vs EUR, aop)7.617.537.467.427.42
Current Account (% of GDP)3.12.23.91.72.8
Current Account Balance (EUR bn)1.51.01.71.01.6
Trade Balance (EUR billion)-7.1-7.6-8.4-9.6-10.3
Exports (EUR billion)10.210.511.712.212.8
Imports (EUR billion)17.318.120.221.923.2
Exports (annual variation in %)8.03.111.44.55.0
Imports (annual variation in %)7.74.711.38.56.0
International Reserves (EUR)13.713.515.717.418.6
External Debt (% of GDP)10795.588.682.375.8

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Croatia Facts

Value Change Date
Bond Yield0.670.0 %Dec 31
Exchange Rate6.64-0.54 %Jan 01

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