Croatia Economic Forecast

Croatia Economic Outlook

September 8, 2020

The economy took a greater-than-expected hit in the second quarter amid the Covid-19 fallout, with GDP declining for the first time in six years and at the sharpest pace since data collection began in 1995. Both private consumption and fixed investment plunged due to containment measures, while exports sank by over a third as the vital tourism industry was crushed amid travel restrictions. Turning to the third quarter, available data paints a mixed picture. Both industrial production and retail sales continued to contract in July, while the unemployment rate remained elevated. Nevertheless, economic sentiment jumped to a five-month high in August on a broad-based improvement across sectors, except construction. Meanwhile, although tourist arrivals reportedly gained pace in July–August, the recent rise in Covid-19 infections could weigh on gradually recovering activity.

Croatia Economic Growth

The coronavirus outbreak and associated restrictions will plunge the economy into its deepest downturn in nearly three decades this year as it suppresses activity. The crucial tourism sector will be pummeled and face even stronger competition as the travel industry gets back on its feet, while domestic demand will shrivel on income losses and elevated uncertainty. FocusEconomics panelists forecast the economy to shrink 9.2% in 2020, which is down 0.5 percentage points from last month’s estimate, and to expand 4.9% in 2021.

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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