In an update, Croatia's central bank, the HNB, has revised its forecasts for the economy, with inflation set to rise while growth slows. In its latest report, released Thursday, the HNB bumped up its inflation projection to 3.7% for this year, but cut its GDP growth forecast to just 3.2% – a drop of 0.2 percentage points for both.

This comes as the bank adjusts its expectations from December, where it had predicted a slightly better economic outlook. Last year, the country’s economy grew at a faster-than-expected pace of 3.8%, but the HNB warns that growth could slow to around 3% over the next two years, with a smaller contribution from domestic demand compared to 2024.

The central bank also pointed to the early months of 2025, predicting sluggish economic activity driven by weak consumer spending. This dip is blamed on the boycott of retail chains in January and February, which has left a dent in the economy. It looks like Croatia’s economic recovery might be facing some serious bumps ahead.