Central bank chief: Strong growth expected in Q2

The Governor of the Croatian National Bank, Boris Vujčić, said on Sunday that Croatia was expected to see major GDP growth in the second quarter, while the economy could expand 6.8% for the year. 

Speaking at an international economic conference in Dubrovnik, Vujčić said Croatia's economy would likely reach a growth rate of about 18% in the second quarter of 2021, which was partly due to the low base in the Q2 2020 when the country had experienced a strong downturn. 

Croatia's economy for the whole of 2021 would likely rebound at a rate of 6.8%, however, the epidemiological situation caused by the COVID pandemic still created uncertainties, Vujčić said.

He explained that in the worst-case scenario, the GDP would grow at a rate of 4.8% in 2021.

Vujčić acknowledged the significant role the of the government’s job-saving subsidies, which helped speed up recovery.

“The crisis has made the ongoing digitisation processes faster, prompting remote working. I expect a large number of people to go back to the office. Only after all things go back to normal, we will be see the real picture of the labor market, which has behaved differently during the pandemic than during the financial crisis in 2009 and 2010. In Croatia, we have already reached the 2019 levels in terms of employment figures and we are now faced with the recurring problem of a shortage of skilled workers,” Vujčić said.

Commenting on the European Union's Next Generation plan, he said that it will be crucial for economic recovery in the medium term.