Erste maintains Croatia's growth fcast at 2.7% in 2017, 2.4% in 2018

Croatia's GDP remained resilient to Agrokor restructuring effects in the second quarter of the year and stood at 2.5% y/y, Erste commented in its latest research paper earlier this week.

"Second half growth looks set to bring modest acceleration, as the tourism performance remains on track for another record strong season, while the private consumption outlook remains supportive, in line with external demand," the lender noted.

It, however, explained that Agrokor restructuring effects are far more likely to weigh on 2018 growth figures, when a growth of 2.4% is expected.

In terms of inflation, Erste said that Croatia is still expected to reverse the 1.1% deflation experienced last year and see an inflation of 1.1% this year, below the 1.4% it predicted in June. 2018 inflation is seen at 1.3%, equal to earlier predictions.

Croatia's unemployment rate is expected to maintain its drop and end 2017 at 10.9%, down from 13.1% last year, before falling further to 10.0% in 2018.

Public debt, too, is seen to drop to 81.3% of the GDP this year, before falling to 79.2% next year.

Croatia ended 2016 with a GDP growth of 3.0%.