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ZAGREB (Croatia), May 7 (SeeNews) - The European Commission said on Tuesday it has lowered its forecast for Croatia's economic growth in 2019 to 2.6% from 2.7% predicted in February, with private consumption expected to remain the main growth driver.
In 2019 and 2020, growth is expected to be driven by private consumption supported by the positive labour market outlook, the European Commission said in its Spring 2019 Economic Forecast.
"Demand for Croatian exports appears to be weakening in line with the projected economic slowdown in the EU, which is the main destination of Croatian exports", the Commission noted.
Strong domestic demand, in particular higher investment activity, is projected to continue supporting strong import growth.
"Overall, the trade balance is set to continue declining."
Tourism represents the main component of export of services and its growth is expected to remain robust, but also at rates below those recorded in past years.
Croatia's real GDP growth is expected to slow further to 2.5% in 2020, the European Commission said.
While the working age population continues shrinking, as a result of still negative migration flows, the labour market participation is expected to continue increasing gradually.
The Commission forecast an inflation rate of 1% in 2019 and 1.2% in 2020 for Croatia.