October 11 (SeeNews) - The International Monetary Fund (IMF) said on Tuesday it expects Croatia's economy to expand by 5.9% this year, improving its 2.7% growth forecast made in April.
However, in the latest edition of its World Economic Outlook report, the global lender lowered its projection for the Adriatic country's gross domestic product (GDP) growth next year to 3.5% from 4.0% it projected in the April edition of the outlook.
The projection for Croatia's inflation this year was increased to 9.8% from 5.9% the IMF forecast six months ago. For 2023, it sees inflation easing to 5.5%.
The IMF expects Croatia's unemployment rate to fall to 6.9% this year and to decline further to 6.6% in 2023.
Last year, Croatia's economy expanded by 10.2%. The average annual inflation rate was 2.6% and the unemployment rate was 8.1% in 2021.
The IMF said its latest forecasts project global growth to remain unchanged in 2022 at 3.2% and to slow to 2.7% in 2023.
“More than a third of the global economy will contract this year or next, while the three largest economies—the United States, the European Union, and China—will continue to stall. In short, the worst is yet to come, and for many people 2023 will feel like a recession,” the IMF said.
Russia’s invasion of Ukraine continues to powerfully destabilize the global economy, the IMF said. Beyond the escalating and senseless destruction of lives and livelihoods, it has led to a severe energy crisis in Europe that is sharply increasing costs of living and hampering economic activity. Gas prices in Europe have increased more than four-fold since 2021, with Russia cutting deliveries to less than 20% of their 2021 levels, raising the prospect of energy shortages over the next winter and beyond. More broadly, the conflict has also pushed up food prices on world markets, despite the recent easing after the Black Sea grain deal, causing serious hardship for low-income households worldwide, and especially so in low-income countries, the IMF said.