December 15 (SeeNews) - Croatia's central bank increased its forecast for the country's economic growth in 2021 to 10.8% from 8.5% predicted in September, it said on Wednesday.
The revision of the growth forecast reflects the levels achieved in the first nine months and the value of some indicators available for the fourth quarter, the central bank said in a statement.
Thus, the gross domestic product (GDP) could exceed the pre-crisis level this year, it added.
Croatia's economic output grew by a real 15.8% year-on-year in the third quarter of 2021, the statistical office said last month. The country's economy expanded by a real 16.1% in the second quarter of 2021.
Croatia's economy contracted 8.4% last year due to the Covid pandemic.
The central bank maintained its earlier forecast for 4.1% GDP growth next year, to be supported primarily by foreign demand.
The expected slowdown is a result primarily of the end of the effect of the low GDP level in 2020 on the annual growth rate, the central bank said, adding that the projection for 2022 is exposed to numerous negative risks, primarily from the development of the epidemiological situation and a further rise in economic uncertainty.
The average consumer price inflation is expected at 2.4% in 2021, with rising energy prices accounting for half of the increase, the central bank said.
For 2022, it expects the average inflation rate to remain at the same level, with risks coming from a further growth of energy prices and other imported inflationary pressures.
In September, the central bank said that under its baseline scenario, inflation in Croatia could mildly speed up to 2.3% in 2021 before slowing down to 2.1% next year.
Thanks to a rise in tourism revenue and net inflow of EU funds, the surplus on the country's current and capital account is expected to exceed 4% of GDP this year and expand further to 5% of GDP next year.