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Croatian c-bank raises 2019 GDP growth forecast to 3.1%

Author Iskra Pavlova
Croatian c-bank raises 2019 GDP growth forecast to 3.1% Boris15/

ZAGREB (Croatia), July 11 (SeeNews) - Croatia's central bank said it has raised its economic growth forecast for this year to 3.1% from the previously expected 2.5%-2.7%

"Current economic growth indicators and the expected continuation of investment growth of both public and private sectors as well as domestic consumption suggest that the real GDP growth in 2019 could reach 3.1%," the central bank, HNB, said in a statement late on Wednesday.

The revision is in line with the latest European Commission forecast, which also on Wednesday lifted its projection for Croatia's 2019 economic growth to 3.1% from a previously predicted 2.6%, pointing to domestic demand as the main growth driver. 

The upward revisions follow the better than expected GDP growth of 3.9% in the first quarter of the year, as earlier reported by Croatia's statistical office.

HNB also said that the employment growth and the decline in unemployment could, however, slow down very gradually, while the inflation rate in 2019 could drop to 0.7%.

The surplus on the current and capital account is seen at 3.1%, while the growth in net export of services is expected to continue together with the stronger absorption of EU funds.

Budget deficit this year is expected at some 0.3% of GDP, in line with the government plan, HNB said, adding that the European Commission predicts the budget might even swing to surplus.