August 24 (SeeNews) - The Croatian economy is expected to have shrunk by 12.4% on the year in the second quarter of 2020 as a result of the coronavirus lockdown, Erste Bank analysts said on Monday.
"For the full-year growth forecast, the third quarter will be crucial, particularly in terms of the extent to which the tourism sector was hit. At this point, we tend to see the risk to the upside to our current growth forecast," Erste said in an emailed statement.
It expects Croatia's gross domestic product (GDP) to contract 9.0% in 2020.
The country's statistical office is expected to release its first estimate on the second-quarter GDP performance on Friday.
In July, the Croatian central bank said the domestic economy could shrink by 9.7% this year, hit by the coronavirus pandemic and related lower tourism revenues.
Also in July, the European Commission revised its forecast on Croatia's economic performance this year, now expecting a 10.8% drop in economic output, deeper than the 9.1% decline it predicted in May. For 2021, the Commission expects 7.5% expansion.
Last week, however, economy minister Tomislav Coric said he believes the GDP drop this year might be smaller than the current 9.4% government forecast, considering the better-than-expected performance of the tourism season in the past few months.
Tourism contributes around a fifth of the country's GDP, but current statistics show that the drop in tourism traffic is not as severe as the originally predicted decline of 60-80%, as Croatia opened for tourists from its main European markets after the end of the first coronavirus wave in late May.
Tourism minister Nikolina Brnjac said earlier in August that in annual terms, tourism traffic in Croatia in July and August is at 60-70% of last year's volume.