The Croatian economy is expected to grow by 1.9% in 2016 before picking up to 2.1% in 2017, the International Monetary Fund (IMF) said in its World Economic Outlook on Tuesday, confirming its April projection.
The IMF reaffirmed and doubled its growth estimate for Croatia for last year, according to which the Croatian economy grew by 1.6% in 2015.
Inflation projections for Croatia for this and next year have been revised. The IMF expects consumer prices to decline by 1.0% in 2016, while in April they were projected to rise by 0.4%. Next year, consumer prices are to rise by 0.8%, while in the April report they were expected to increase by 1.3%. The estimated decline in consumer prices in 2015 of 0.5% was confirmed.
The IMF revised upward its forecast of Croatia's current account surplus in 2016, to 3.0% of GDP from 2.7% projected in April. Next year the surplus is expected to slide to 2.2%, compared with 2.1% forecast in the spring outlook. The forecast for 2015 was revised from 4.4% to 5.2% of GDP.
The IMF reaffirmed the estimated unemployment rates for Croatia in 2016 and 2017 of 16.4% and 15.9% respectively, as given in the April report. It also confirmed its forecast for 2015, according to which the unemployment rate was 16.9%.
The IMF revised down its growth forecast for emerging economies in Europe, including Croatia, in 2016 from 3.5% to 3.3%. Next year economic activity in this group of countries is expected to slow to 3.1%, down by 0.1 percentage point from the IMF's July projection.
Among these countries, Romania is expected to experience the highest growth this year, of as much as 5.0%, followed by Turkey (3.3%), Poland (3.1%) and Bulgaria (3.0%).
Growth for the euro area is forecast at 1.7% in 2016 and 1.5% in 2017.
The global economy is projected to grow by 3.1% in 2016 before picking up to 3.4% in 2017, reflecting the IMF's spring forecast.
"A return to the strong, sustainable, balanced, and inclusive growth that Group of 20 leaders called for at Hangzhou in September still eludes us. Global growth remains weak, even though it shows no noticeable deceleration over the last quarter. ... Taken as a whole, the world economy has moved sideways," Maurice Obstfeld, Economic Counsellor and Director of the Research Department at the IMF, said in his opening remarks while presenting the report.
"Over the medium term, while we expect that advanced economies will continue along a disappointingly low growth path, emerging market and developing economies should accelerate as most of the large countries with currently shrinking economies stabilise and return to their longer-term growth paths," Obstfeld said.