May 17 (SeeNews) - Croatia's real gross domestic product (GDP) could keep growing on the back of labour market recovery, the governor of the country's central bank, Boris Vujcic, said on Thursday.
The central bank expects Croatia's inflation to accelerate to 1.3% in 2018, and further to 1.4% next year, Vujcic said in a press release posted on the website of the bank.
In December, the central bank forecast that Croatia's will see GDP growth of 2.9% this year.
Vujic also said that Croatia's public debt-to-GDP ratio is expected to fall to 70% by 2019.
The governor noted, however, that Croatia is experiencing demographic changes which are causing problems for the labour market. According to projections, the country's population will decrease by around half a million to 3.7 million by 2050. Vujcic said that the decline in population numbers can be mitigated by increasing the participation of inactive population on the labour market.
"Alternative scenarios would include a lower level of economic activity due to a shortage of workers, a more significant arrival of foreign workers, the automation of work and the adoption of new technologies", the central bank governor added.
Croatian citizens are relocating to EU countries offering higher wages, Vujcic said, adding that when salaries rise, emigration will slow.
Croatia's gross domestic product increased by a real 2.8% in 2017, after growing by 3.0% a year earlier.