The Croatian economy could grow by 1.2 percent this year, while inflation could reach 7.5 percent, it was pointed out on Monday at the presentation of the new RBA Analysis "Monetary Tightening and Fiscal Easing".
RBA analysts thereby revised down their earlier estimate of Croatian GDP growth in 2023, from 1.8 to 1.2 percent, and raised the inflation projection, whose growth they had previously forecast to 6.7 percent.
Chief Macroeconomist of Raiffeisen Bank Zrinka Živković Matijević pointed out that even today's data from the CBS on the decline in industrial production and consumption in retail trade in December confirmed that the economy is slowing down.
Namely, industrial production fell on the annual level for the second month in a row, this time by 2.4 percent, while retail trade fell by 0.8 percent on the annual level.
Živković Matijević asserted that the decline in population consumption would be even greater, but that Croatia has a solid labour market, with the registered unemployment rate at the lowest level in history, amounting to 6.8 percent, with continued employment growth.
However, she pointed out that the labour market is increasingly facing a labour shortage, which is being replaced with the employment of an increasing number of workers from third countries, who submitted around 129,000 job applications last year, which exceeded the average number of registered unemployed persons. in 2022, which amounted to about 116 thousand.
When it comes to GDP, the RBA forecasts that the growth of the Croatian economy in 2022 will amount to 6.3 percent, while this year there will definitely be a slowdown, even regardless of external factors such as the energy crisis, the war in Ukraine and the slowdown of the economy. main foreign trade partners, assessed Živković Matijević.
On the other hand, although the positive tourism results are encouraging, Živković Matijević warned that Croatia's dependence on tourism is increasing, so it is necessary to work on diversifying the economy and strengthening the industry.
"The fact remains of a high and even growing dependence on tourism based on the arrival, overnight stays and spending primarily of foreign guests. Therefore, the length and strength of the potential recession, along with curbing inflation, in Croatia's most important emitting markets largely determines the growth prospects not only of service exports but also of personal consumption due to the structure of tourist capacities and the impact on the mood and expectations of Croatian households," the RBA analysis reads.