The European Commission on Tuesday revised down its growth forecast for the Croatian economy for this year from 2.7% to 2.6%, underscoring that GDP will have finally surpassed the pre-crisis level this year.
"Croatia’s economy is expected to continue growing at a moderate pace over the forecast horizon. Household consumption remains strong as disposable incomes continue to benefit from steady growth of employment and wages, in an environment of low inflation. Participation rates are projected to keep increasing gradually as more jobs are being created. Continued growth in tax revenue and contained spending growth are expected to maintain the government balance in a mild surplus and the debt ratio on a steady declining path," the EC said in its Spring Economic Forecast released in Brussels on Tuesday.
The Commission predicts that economic growth will continue to slow down to 2.5% in 2020. In its previous Interim Winter Economic Forecast in February, the Commission projected Croatia's GDP growth at 2.7% in 2019 and 2.6% in 2020.
Following last year's budget surplus of 0.2% of GDP, the EC now estimates that this year's surplus could be 0.1% of GDP and 0.5% in 2020. At the same time the share of public debt in GDP could be reduced from last year's 74.6% to 70.9% in 2019 and to 67.6% in 2020.