Bank economists raise GDP growth forecast to 1.3 pct

The chief economists of the six biggest Croatian banks have raised their forecast of Croatia's growth this year to 1.3 percent, the Croatian Banking Association (HUB) said on Friday.

Their previous 2016 growth forecast, from last November, was 0.9%, but now their predictions range from 1% to 1.5%.

HUB recalled that in its spring economic outlook the International Monetary Fund raised its forecast of Croatia's real GDP growth from 1% to 1.9%, while the European Commission recently said that the potential growth of Croatia's real GDP, sustainable in the long term, was under 1%.

The six economists forecast a deficit-GDP ratio of 3.6% of GDP, as against the government's forecast of 3% or less, and warn that the public debt-GDP ratio could reach 87.3% by the end of the year. They also predict that unemployment will continue to decrease to an average 16%, that deflation will continue at an average rate of 0.5%, that the balance of payments will remain in the black, and that the external debt-GDP ratio will stay the same.

The six economists are more cautious in their forecasts because they are pessimistic about the speed of the recovery of personal consumption and because of trends in real state spending.

Last update: Fri, 22/04/2016 - 12:47

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