June 24 (SeeNews) - The International Monetary Fund (IMF) said it expects Croatia's economy to grow between 5% and 6% this year thanks to a recovery of the services sector and investments after last year's contraction of 8%, if the pandemic does not provide further unwelcome surprises.
"Since the first quarter, the recovery has picked up noticeably with areas like construction and manufacturing already reaching activity levels higher than in 2019," the global lender said in a staff concluding statement on Wednesday following the 2021 Article IV mission. "Overall, the number of registered unemployed persons has fallen by nearly 13 percent since a year ago."
Croatia's economy contracted last year due to the Covid-19 pandemic which severely affected tourism - a key industry of the Adriatic country of 4.4 million people.
In the first quarter of 2021, Croatia's economic output shrank by a real 0.7% year-on-year but increased by 5.8% compared with the fourth quarter of last year.
Since the first quarter, the recovery has picked up noticeably with areas like construction and manufacturing already reaching activity levels higher than in 2019 and the number of registered unemployed persons has fallen by nearly 13% percent since a year ago, the IMF said.
“However, tourism and directly related sectors are yet to fully recover. This process is likely to take another year or two. With sufficient luck regarding tourism outcomes, and a successful vaccination drive within the next months, growth could even exceed 6 percent this year. Assuming the pandemic fades by the end of this year, growth could remain high over the next few years, if the country makes full and timely use of the potentially sizable forthcoming inflow of EU funds,” the IMF said.