The Zagreb-based Institute of Economics has revised upward its forecast of Croatia's economic growth from the previous 1.3% to 1.5%, and this revision has been spurred by fresh data showing a 1.6 percent growth in 2015 and favourable trends in the Coincident Economic Index of the Institute of Economics (CEIZ).

Having in mind a 1.5 percent growth rate of GDP in 2015 and favourable indicators in the CEIZ index as well as data on industrial production in January 2016, analysts of the Institute of Economics announced continued positive growth rates of 1.5% in 2016 and 1.8% in 2017, according to the latest edition of Croatian Economic Outlook Quarterly.

"After six consecutive years of declining activity, Croatian GDP rebounded in 2015 and recorded a positive growth rate of 1.6 percent, still far from pre-crisis growth levels, but nonetheless an important turnaround for future prospects. Based on newly released data for 2015, we have slightly revised our forecasts for real GDP growth rates for 2016 and 2017 upwards to 1.5 and 1.8 percent. Unlike in recession years, domestic demand is expected to have a positive contribution to GDP growth, as was the case in 2015," the Institute said on its web site.   

"Although the initial effects of personal consumption increase due to tax changes have subsided, real disposable income is permanently increased. As oil prices are expected to stay moderate throughout 2016, and government spending on public sector wages and pensions is also likely to remain stagnant, while consumer optimism is improved due to a long-awaited recovery of domestic activity, our forecasts for personal consumption growth are now at 1.4 and 1.5 percent for the current and the following year."

"In the final quarter of 2015, investment activity declined by 0.1 percent (measured by seasonally adjusted figures on a quarter-to-quarter basis). This was, however, not enough to offset relatively high growth rates in the first three quarters, so the year of 2015 as a whole recorded investment growth of 1.6 percent. In the first and the second quarter of 2016, we forecast a slight fall in investments, due to the prolonged formation of government and uncertainties regarding the budget for 2016, but investments should then bounce back in the second half of the year. Hence, our new growth forecasts stand at 1.9 percent (down by 0.2 percentage points) for the current year and 3 percent for the following year. "

Related stories

Latest news

Syrian opposition rules out future role for President al-Assad

The Syrian opposition said Friday it would not accept any role for President Bashar al-Assad in the future of the war-torn country, reacting to a recent US shift saying that removing al-Assad is no longer a priority for Washington.

Russian Army integrates breakaway forces of Georgian province

Parts of the small fighting forces of the Georgian breakaway province of South Ossetia have been placed under Russian military control, Russian Defence Minister Sergei Shoigu said on Friday.

Czech Republic's Pilsner Urquell beer is now Japanese

Japanese brewing company Asahi completed its takeover of the Czech brewery Pilsner Urquell on Friday, Asahi said in a statement.

Judge approves 25-million-dollar settlement of Trump University case

A US district judge on Friday approved a 25-million-dollar settlement of lawsuits and state fraud allegations against Trump University, the US president's now-defunct business venture.

Former Thai premier Thaksin to junta on reconciliation: 'Cut me out'

Former Thai prime minister Thaksin Shinawatra on Friday announced that he is not interested in the junta-led reconciliation process, three days after the junta handed him a half-a-billion-dollar tax bill for his past business deal.

Dalic: We welcome possible deal between Agrokor and banks

The government welcomes the possibility of an agreement being concluded between the Agrokor food company and creditor banks, and the bill on vitally important companies is not a fallback plan but the result of the government's care for the overall economic and financial stability of Croatia, Deputy Prime Minister and Minister of Economy Martina Dalic told a press conference in Zagreb on Friday.

Croatia, China sign action plan for cooperation in agriculture

The Croatian and Chinese ministries of agriculture on Friday signed an action plan for cooperation in the field of agriculture for the period 2017-2018, the Croatian ministry said in a statement.

ZSE indices up, Agrokor shares in focus of investor interest

The Zagreb Stock Exchange (ZSE) indices on Friday rose by more than 1.8%, with stocks of the Agrokor food and retail concern being in the focus of investor interest again.

Berlin police defend handling of Berlin market attacker

Berlin police defended themselves on Friday against accusations that they stopped surveillance on Berlin Christmas market attacker despite knowing in June 2016 he was dangerous.

Croatia, creditors tailor emergency measures to save tottering giant

Croatia's tottering retail and food giant Agrokor reached an agreement with its creditors, putting its debts standby and allowing it to continue working during emergency restructuring, the Croatian branch of Austria's Erste Bank said Friday.

Agrokor's creditors say standstill agreement to go into force today

A standstill agreement regarding the Agrokor concern's existing financial obligations to banks will take effect on Friday, additional capital will be injected into the concern in the coming days and the concern will be actively restructured, which includes a change of its management, it was said on Friday after a meeting between Agrokor's suppliers and creditor banks.

Palestinians, UN slam Israel's new settlement plan

Palestinians, Israeli activists and the UN lambasted the government of Israeli Prime Minister Benjamin Netanyahu on Friday, a day after it gave the go-ahead for the first new West Bank settlement in a quarter of a century.

South Sudan rebels release three abducted foreign oil workers

South Sudanese rebels have released three foreign engineers they abducted in early March in the oil-rich Upper Nile region, Foreign Affairs Ministry official Mawein Makol Arik said on Friday.

Turkish opposition: Imprisoned party chief has gone on hunger strike

The head of Turkey's pro-Kurdish opposition party has launched a hunger strike from prison.

European leagues threaten Champions League schedule clashes

The European Professional Football Leagues (EPFL) on Friday threatened schedule clashes on Champions League matchdays in an ongoing dispute with the governing body UEFA.

Danish court revokes citizenship of IS volunteer

A Danish appellate court on Friday stripped a man of his Danish citizenship for volunteering to fight for the extremist Islamic State in Syria.

Banks and Agrokor agree on key elements of standstill agreement

Member banks of the coordinating committee of financial creditors and representatives of the Agrokor food company have in principle agreed on key elements of a standstill agreement, which is expected to be signed later today, announcing changes in the company's management team, Erste Bank said in a statement on Friday afternoon.

Syrian man on trial in Sweden; mosque attack labelled terrorism

A Syrian man went on trial Friday in the southern Swedish city of Malmo, charged with terrorism and arson after an attack last year on a building used as an assembly hall by Shiite Muslims.