April 4 (SeeNews) - Erste Group said it expects Croatia's current account surplus to moderate towards 2.5% of GDP in 2018, as rising import pressures should be offset by support from tourism and stronger utilization of EU funds.
In 2017, Croatia's current account surplus increased to 3.9% of GDP compared with 2.6% of GDP in 2016, with ailing Agrokor-related risk provisioning having one-off positive impact on the rising surplus, the banking group said in a short note on Croatia's balance of payments on Tuesday.
Erste predicts there will be no major shifts among the main drivers going forward, with a similar trade balance momentum, and domestic demand-driven imports dominating over the steady export performance.
"Support from the services side should remain the key factor, as we expect to see another strong tourist season in terms of physical indicators, while also seeing a stabilized consumption pattern," Erste Group noted.
It also said that income accounts are expected to keep their overall supportive role for the current account balance, though having a less pronounced impact on the headline figure vs. 2017, as the one-off effect from Agrokor concern fades.
Croatia's current account surplus increased to 1.9 billion euro ($2.3 billion) in 2017, from 1.2 billion euro a year earlier, the central bank said last week.
($=0.8112 euro)