EC forecasts GDP growth for Croatia but also a strong surge in inflation

According to the European Commission prior to the Israeli-American war against Iran, the global economy was gaining momentum, as was the EU economy, which was also seeing inflationary pressures further abating. This, the EC claims, was materially changed by the war in Iran, which provided one of the most significant global energy supply disruptions in recent history.

In its spring forecast the European Commission predicts that the war against Iran will accelerate inflation and slow economic activity in Europe. The EC expects GDP in the EU and Eurozone to slow to roughly one percent, while it puts Croatia's GDP at 2.7 percent - behind only Malta, Poland and Lithuania. The European Commission's Commissioner for Economy and Productivity, Valdis Dombrovskis: "First, on the broader context; the conflict in the Middle-East has triggered a new energy shock, with a major impact on the global and European economy. It fuels inflation and shakes economic sentiment. Second, on growth; the EU economy is expected to continue expanding, but at a slower pace. Third, on inflation; energy inflation is already on the rise and price pressures are set to spill over to other areas. Fourth, on public finances; slower economic growth and rising expenditure is increasing deficits. And fifth, on uncertainty; an exceptionally high degree of uncertainty surrounds the evolution of the conflict in the Middle-East. The development in energy prices in this forecast is based on future's prices. They point to a relatively swift, albeit partial normalization of supply conditions."

As far as inflation is concerned, the Commission forecasts that inflation jump to three percent in Europe, while Croatia will have the bloc's second highest inflation at 4.6 percent. Speaking at today's cabinet session, Prime Minister Andrej Plenković announced the adoption of a new anti-inflation package: "Government has for some time now been preparing a new package of anti-inflation measures, which will additionally respond to the challenges of price growth and market activity. In question are concrete responses and actions aimed at protecting citizen's standard of living, stabilizing the market and reducing inflationary pressures. Obviously, this is an all-encompassing and well thought out package, which should produce results this year."

Source: HRT