Expected lower growth of exports between Croatia and other European Union members for this year has meant that the EU has lowered its estimate of Croatia’s GDP growth for 2019. Previously the European Union had stated that Croatia’s economy should grow this year by 2.8 percent however the new forecast on the back of the predicted export business has seen them now readjust that figure to 2.7 percent.
For concerning for the Croatian economy is that for 2020 the European Commission estimates that Croatia’s GDP will continue to slow down and reach only 2.6 percent.
In 2017 Croatia’s economy grew by 2.9 percent so if these new figures turn out to be actually correct then the economy is slowing down. For the first three quarter period of 2018 GDP in the country increased by 2.7 percent.
"Private consumption is expected to remain the main driver of growth, supported by improving labour market conditions, positive consumer sentiment, low interest rates and subdued inflation. Administrative data at end-2018 suggest that dynamic employment growth continues to drive a steady fall in the unemployment rate. Private investment is expected to continue its modest growth, as companies continue to enjoy favourable financing conditions. The projected pick-up in disbursements from EU funds should provide a boost to public investment, which will nevertheless stay well below pre-recession levels," stated the European Commission report.
Adding that “In view of the anticipated slowdown in Croatia’s main trading partners in the EU, goods exports are likely to grow more slowly than in recent years. Service exports are expected to continue performing well on account of an increasingly extended tourist season and sizeable investment in higher-end hotels in recent years. Bolstered by high domestic demand, imports of goods are set to remain strong, slowing only slightly over the forecast horizon and driving the goods trade balance increasingly negative.”