December 19 (SeeNews) - The Croatian Banking Association, HUB, said on Thursday the chief economists at the country's four largest banks have revised their 2019 economic growth forecasts to an average of 2.9% from 3.0% predicted in July.
"The average estimate of 2.9% is moving within a very narrow forecast range of 2.8% to 3.0%, with personal consumption and investments pushing up, while the recovery of exports cancelling out the import's contribution and thus [...] making negative the input of foreign trade on growth," HUB said in a statement.
For next year, the local economists are keeping unchanged their 2.5% economic growth forecast, expecting lower contribution of all GDP components compared to 2019. According to the economists, the reason for the 2020 slowdown lies in the international environment but also in well known domestic weaknesses such as delay of reforms, obstructions to investments, inefficient state sector, as well as unfavourable demographic trends.
Personal consumption will slow down its growth to 2.9% in 2020 from this year's estimated 3.4%. Investments will also grow slower, by 5.7% next year, compared to an anticipated increase of 7.4% in 2019, according to the predictions of the bank economists.
Croatia's general government deficit is expected to widen to 0.4% of GDP in 2020 from this year's 0.2% of GDP.
The economists see the unemployment rate declining to 6.6% next year from 7.1% projected for 2019.
The average growth of gross wages is seen speeding up to an annual 3.8% in 2020 from 3.6% anticipated for this year.
Average inflation would also quicken, to 1.3% next year from this year's anticipated 0.8%.
In their latest estimates, the World Bank, the International Monetary Fund, the European Bank for Reconstruction and Development and the European Commission expect Croatia's economy to grow by 2.9% - 3.0% this year and predict a slowdown to 2.5% - 2.7% in 2020.
The Croatian central bank said earlier this month the country's economic growth is expected to slow down to 2.8% in 2020 from 3.0% anticipated in 2019.