OECD lowers Croatia's 2023 GDP growth f'cast to 2.5%

"Output growth is projected to moderate in the second half of 2023 before firming slightly in 2024 and 2025," OECD said in its OECD Economic Outlook released on Wednesday.

"Weaker external demand will be the main drag on growth. Robust private consumption, as the tight labour market supports households’ real incomes, and rising investment as the government advances with its Recovery and Resilience Plan will support domestic demand," it added.

For next year, OECD improved its forecast or Croatia’s economic growth to 2.6% from 2.4% it projected in September. In 2025, the OECD expects that Croatia’s economy will expand 2.7%.

"A small government budget deficit is expected in 2023 but plans for tax cuts and higher spending on investment, wages and pensions are expected to contribute to a wider deficit in 2024. Rising revenues are projected to enable a modest improvement in the budget balance in 2025," the OECD said.

It projected that Croatia’s government deficit will widen from 0.3% of the planned gross domestic product (GDP) for 2023 to 1.8% next year and 1.6% in 2025.

The Adriatic country is in the process of accession to the 38-member OECD.