Croatia Economic Forecast

Croatia Economic Outlook

April 2, 2019

The economy lost steam in Q4 2018 on the back of waning external demand from EU trading partners and despite the strengthening domestic sector. Turning to Q1 2019, available data points to an uptick in economic activity: Industrial production rebounded strongly in January and business confidence was upbeat in the first two months of the year, which bodes well for private sector activity. On the demand side, while retail sales accelerated in January, the unemployment rate rose again in the same month and consumer confidence worsened in January-February. Meanwhile, S&P upgraded Croatia’s credit rating from BB+ to BBB- in late March, citing the country’s improving fiscal metrics as the main reason behind the upgrade. The ratings agency stressed the role of tourism-related inflows, solid domestic demand and fiscal consolidation measures in driving the improved fiscal performance.

Croatia Economic Growth

Growth should be resilient this year, underpinned by solid domestic demand. Rising inflows of EU funds and a buoyant construction sector are poised to drive an acceleration in fixed investment. Moreover, moderate price pressures and further job gains will buttress consumer spending. Marked economic weakness in Italy and Germany could restrain growth, however. FocusEconomics analysts expect growth of 2.5% in 2019, which is down 0.2 percentage points from last month’s forecast, and 2.5% again in 2020.

Croatia Economy Data

Population (million)
GDP per capita (EUR)10,33810,38210,70411,27111,810
GDP (EUR bn)
Economic Growth (GDP, annual variation in %)-0.5-
Consumption (annual variation in %)-1.9-
Investment (annual variation in %)1.4-
Industrial Production (annual variation in %)-
Retail Sales (annual variation in %)-
Unemployment Rate21.519.417.614.712.2
Fiscal Balance (% of GDP)-5.3-5.1-3.4-0.90.8
Public Debt (% of GDP)80.584.083.880.678.0
Money (annual variation in %)11.59.611.418.219.1
Inflation Rate (CPI, annual variation in %, eop)0.3-0.5-0.60.2-  
Inflation Rate (HICP, annual variation in %)2.30.2-0.3-0.61.3
Inflation (PPI, annual variation in %)-  -  -  -  -  
Policy Interest Rate (%)
Stock Market (annual variation in %)3.1-3.1-2.818.1-7.6
Exchange Rate (vs EUR)7.627.667.647.557.43
Exchange Rate (vs EUR, aop)7.587.637.617.537.46
Current Account (% of GDP)
Current Account Balance (EUR bn)
Trade Balance (EUR billion)-6.6-6.5-7.0-7.3-8.2
Exports (EUR billion)8.99.410.210.511.7
Imports (EUR billion)15.516.017.217.919.8
Exports (annual variation in %)
Imports (annual variation in %)
International Reserves (EUR)12.912.713.713.515.7
External Debt (% of GDP)10510610188.682.6

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Croatia Facts

Bond Yield1.860.0 %Apr 18
Exchange Rate6.61-0.54 %Apr 22
Stock Market1,819-0.48 %Apr 18

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