BRUSSELS – The Croatian financial system will obtain sturdy progress of three.6 % this yr, with the primary drivers being sturdy family consumption and investments, based on the European Fee’s autumn financial forecasts launched on Friday.
Croatia is on the prime within the European Union by way of financial progress charge. Together with Cyprus, whose financial system can be anticipated to develop by 3.6 %, Croatia is in second place behind Malta, which is predicted to attain a progress of 5 %.
Within the subsequent yr, 2025, the Croatian financial system is predicted to develop by 3.3 %, and in 2026 by 2.9 %.
The forecasts are considerably higher than the spring ones, which had been revealed in mid-Might, when the Fee estimated that the Croatian financial system would develop 3.3 % this yr and a couple of.9 % subsequent yr.
The Croatian financial system is rising considerably quicker than the typical within the EU and the eurozone.
The Fee forecasts that the financial system within the EU, after an extended stagnation, will file a modest progress of 0.9 % this yr, and the eurozone 0.8 %. Subsequent yr, progress is predicted to speed up to 1.5 % within the EU and 1.3 % within the euro space, and to 1.8 % within the EU and 1.6 % within the eurozone in 2026.
Consumption as the primary driver of GDP
The Fee estimates that sturdy progress in Croatia shall be pushed by non-public consumption attributable to sturdy progress in actual wages and employment, in addition to sustainable investments.
Authorities spending is predicted to extend, primarily as a result of complete public sector wage reform that considerably aligned public wages in establishments and sectors, but in addition resulted in a big one-time wage enhance.
Funding is predicted to stay sturdy, supported by an additional acceleration of expenditure financed from the Restoration and Resilience Mechanism, with an acceleration of fund withdrawals underneath the Multiannual Monetary Framework (MFF) for 2021 – 2027 (November 15, 2024).
