September 21 (SeeNews) - The Croatian unit of Addiko Bank, former Hypo Alpe Adria Bank, said it expects the country's gross domestic product (GDP) will grow by 3.0% in 2017, on the back of a record tourist season and generally stronger than expected foreign demand.
Croatia's economic expansion is seen at 3.0% in 2018 before slowing to 2.6% in 2019, Addiko Bank said in its Macroeconomic Outlook 2018-2019 report issued on Wednesday.
Consumption has been growing is growing steadily in 2017 as a result of the more favourable financing conditions, tax reforms, solid employment growth and increased remittances, Addiko Bank said.
In 2018, Croatia's economic growth is expected to be supported by the recovery in the euro area, further trade integration with EU member states, a growth of income from tourism, strong demand, expansion of construction activities and inflow of EU funds, the lender noted.
Risks in 2018 stem from the effects of the restructuring of ailing food-to-retail concern Agrokor, the shortage of skilled labour force, as well as unpredictable regulations affecting the operations of the financial sector, particularly commercial banks, Addiko Bank said.
Croatia's public debt is expected to stand below 80% of GDP next year, opening space for a sovereign credit rating upgrade.
Croatia's annual GDP growth picked up to 2.8% in the second quarter from 2.5% in the preceding quarter. In 2016, the GDP growth accelerated to a real 2.9% from 1.6% in 2015.
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