ZAGREB (Croatia), October 6 (SeeNews) - The World Bank said it has improved its forecast for Croatia's gross domestic product (GDP) growth in 2021 to 7.6%, up 2.1 percentage points from its previous forecast made in June.
“In the first half of 2021, Croatia's economy continued to recover from the deepest recession in the country’s history. Abundant EU funds and an improved global outlook are expected to provide a strong boost to growth over the medium term,” the global lender said in Europe and Central Asia Economic Update: Fall 2021 released on Tuesday.
The World Bank's projection is lower than the forecast for 8.5% economic expansion in 2021 made by Croatia's central bank last week. Croatia's economy contracted by 8.4% last year due to COVID19 pandemic and the country has also suffered from two heavy earthquakes.
According to the World Bank, the Adriatic country is likely to return to its pre-crisis level of output in 2022. Nevertheless, at 64.1% of the EU27 GDP per capita in 2020, Croatia remains one of the least developed countries in the EU, the bank noted added.
“Under the assumption that a broadly favorable epidemiological situation continues in the future and social distancing measures remain relaxed, strong and broad-based growth is expected to continue over the 2022-2023 period with real GDP surpassing its pre-crisis level in 2022,” the World Bank said.
Accelerating Croatia’s economic growth over the medium term will crucially depend on the government’s willingness and capacity to undertake structural reforms to boost productivity including reforms in the business environment, public administration, education system and the judiciary, the World Bank added.
The World Bank expects Croatia's GDP to grow by 6.0% in 2022 and 4.2% in 2023.