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Croatia Economic Forecast

Croatia Economic Outlook

The economy performed well in Q4, expanding 4.0% year on year and rebounding quarter on quarter. In annual terms, household consumption slowed in the last three months of the year, and public consumption and fixed investment growth accelerated. On the external front, exports and imports growth moderated markedly, and net exports detracted from growth. Overall, 2022 GDP growth landed at 6.3%, down from the 13.1% seen in 2021. Turning to Q1 2023, available data is fairly positive. Retail sales and tourist arrivals rose in annual terms in January, while consumer confidence improved in January–February from the previous quarter. Moreover, in January, the unemployment rate continued trending downwards, and average earnings rose. However, industrial output remained in contractionary territory in the same month amid soft external goods demand and high producer prices.

Croatia Inflation

Harmonized inflation fell to 11.7% in February from 12.5% in January amid smaller price rises for transportation, food and housing. Our panelists expect further declines in inflation later this year due to the high base effect, cooling demand and supply chain normalization. Further government relief for energy bills is a downside risk to the outlook.

Croatia Economic Data

2017 2018 2019 2020 2021
Population (million) 4.1 4.1 4.1 4.0 4.0
GDP (USD bn) 55.8 61.3 61.3 57.5 68.8
GDP per capita (USD) 13 14 15 14 17
GDP (EUR bn) 49.5 51.9 54.8 50.5 58.2
GDP per capita (EUR) 12 12 13 12 14
Economic Growth (Nominal GDP, ann. var. %) 4.6 4.9 5.5 -7.9 15.4
Economic Growth (GDP, ann. var. %) 3.4 2.8 3.4 -8.6 13.1
Domestic Demand (ann. var. %) 2.6 3.2 4.8 -3.1 7.3
Private Consumption (ann. var. %) 3.2 3.3 4.0 -5.1 9.9
Government Consumption (ann. var. %) 2.2 2.3 3.1 4.3 3.0
Fixed Investment (ann. var. %) 1.6 3.9 9.0 -5.0 4.7
Exports (G&S, ann. var. %) 6.9 3.7 6.8 -23.3 36.4
Imports (G&S, ann. var. %) 8.4 7.5 6.6 -12.4 17.6
Industrial Production (ann. var. %) 1.9 -0.7 0.6 -3.4 6.3
Retail Sales (ann. var. %) 4.6 4.0 3.6 -5.6 11.7
Wages (ann. var. %) 5.3 4.3 3.5 4.7 5.4
Unemployment (% of active population, aop) 11.0 8.4 6.7 7.7 7.7
Fiscal Balance (% of GDP) 0.6 -0.1 0.2 -7.3 -2.6
Public Debt (% of GDP) 76.5 73.2 71.0 87.0 78.4
Inflation (CPI, ann. var. %, eop) 1.2 0.9 1.4 -0.7 5.5
Inflation (CPI, ann. var. %, aop) 1.1 1.5 0.8 0.2 2.6
Inflation (HICP, ann. var. %, eop) 1.3 1.0 1.3 -0.3 5.2
Inflation (HICP, ann. var. %, aop) 1.3 1.6 0.8 0.0 2.7
Inflation (PPI, ann. var. %, aop) -2.0 0.0 0.7 -2.6 5.2
CNB Discount Rate (%, eop) 3.00 3.00 3.00 3.00 3.00
Stock Market (ann. var. of CROBEX %) -7.6 -5.1 15.4 -13.8 19.6
Current Account Balance (EUR bn) 1.7 0.9 1.6 -0.3 1.0
Current Account Balance (% of GDP) 3.5 1.8 2.9 -0.5 1.8
Merchandise Trade Balance (EUR bn) -8.5 -9.7 -10.5 -8.9 -11.4
Merchandise Exports (EUR bn) 11.7 12.2 12.8 12.0 14.8
Merchandise Imports (EUR bn) 20.2 21.9 23.3 20.9 26.2
Merchandise Exports (ann. var. %) 11.4 4.4 5.1 -6.2 23.1
Merchandise Imports (ann. var. %) 11.3 8.5 6.6 -10.4 25.5
Foreign Direct Investment (EUR bn) 0.4 1.1 0.4 0.1 0.5
International Reserves (EUR bn) 15.7 17.4 18.6 18.9 25.0
International Reserves (months of imports) 9.4 9.6 9.6 10.9 11.5
External Debt (EUR bn) 43.9 42.8 40.6 41.3 47.2
External Debt (% of GDP) 88.6 82.4 74.1 81.8 81.1

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