Croatia Economic Forecast

Croatia Economic Outlook

May 12, 2020

Incoming data points to a deep recession as the economy reels from Covid-19 fallout, with Croatia expected to be one of the hardest-hit economies in the region due to its dependence on tourism and given that Italy is its largest trading partner. Retail sales recorded the largest drop since early 2010 in March, as self-isolation and physical distancing measures took hold. Moreover, industrial production also recorded a significant drop in March and consumer confidence nosedived in April. In order to combat the economic damage, the government unveiled several stimulus measures in March and April, and on 7 May adopted a revised budget accounting for the change in fiscal picture. The revised budget now targets a higher 7% of GDP deficit and forecasts an over 15% drop in government revenues due to the pandemic.

Croatia Economic Growth

GDP is set to record the largest contraction since 2009 this year, as Covid-19 ravages the important tourism sector. The pandemic will also depress export demand, particularly from key partner Italy, while government finances are seen deteriorating notably this year. FocusEconomics panelists forecast the economy to shrink 7.9% in 2020, which is down 3.2 percentage points from last month’s estimate, and to expand 4.4% 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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