May 23 (SeeNews) - The International Monetary Fund (IMF) said on Tuesday it expects Croatia's economy to expand 2.2% this year, improving its 1.7% growth forecast made in April.
Croatia’s economic growth is projected to moderate in 2023, following two years of strong performance, and to recover to its potential, of about 3%, over the medium-term, supported by investment and reforms under the National Recovery and Resilience Plan (NRRP), the global lender said in a staff concluding statement for the 2023 Article IV consultation mission.
Croatia’s GDP expanded by a real 6.3% last year and by a real 13.1% in 2021, according to data released earlier by the statistical office.
“The euro adoption marks a momentous achievement for Croatia and is a testament to diligent policymaking and concerted efforts,” according to the statement.
The Croatian economy has also been resilient in the face of the pandemic and Russia’s war against Ukraine, in part reflecting the authorities’ skilful macroeconomic and financial management, it added.
The authorities’ steadfast implementation of the NRRP is commendable. That said, Croatia still faces the challenge to further raise the living standards of its people in a sustainable manner, according to the IMF.
Policies should focus on continuing prudent fiscal, financial, and macroprudential policy stances to complement the European Central Bank’s monetary tightening and build adequate buffers, and advancing structural reforms and maintaining reform momentum to improve competitiveness and foster faster income convergence with richer eurozone countries, anchored by the NRRP, the lender added.