15:32 / 07.07.2021.

Author: Domagoj Ferenčić

EC raises projections for Croatia's GDP growth in 2021 and 2022

European Commissioner for the Economy Paolo Gentiloni

European Commissioner for the Economy Paolo Gentiloni

Foto: European Union / XINHUA/PIXSELL

The European Commission released its Early Summer Forecast on Wednesday. Already in the first quarter of this year, Croatia is seeing strong GDP growth, at 5%. On an annual basis, Croatia's GDP is expected to grow by 5.4% this year and 5.9% next year.

Presenting the commission's forecast today, the European Commissioner for the Economy, Paolo Gentiloni, said that reintroduced restrictive measures and new wave of spread of the coronavirus in the first months of the year had resulted in the European economy growing slower than projected. He added however, that the effects of the restrictive measures and continually growing vaccination rate had resulted in a lower infection rate and the easing of measures in most segments of society, including the service industry.

During his presentation of the commission’s revised forecast for the European Union, Gentiloni said that the growth forecast for GDP in the EU is now expected to increase by 4.8% in 2021, adding that the forecast for 2022 was 4.5% for the European Union. This is an increase from the previous projections of 0.6% this year and 0.2% next year. The increase of 0.6% is the biggest upward revision in more than ten years.

Gentiloni added however, that inflation will also increase by 1.9% in the Eurozone and 2.2% in the entire union. He said that this would be as a result of higher energy prices and raw materials used in production, which will have a knock-on effect of higher retail prices.

The commission's forecast maintains that the Croatian economy made a speedy recovery in the first quarter of this year, with GDP growth of 5.4% expected this year and 5.9% in 2022, while inflation should come in at 1.5% this year and 1.3% in 2022.

The commission also announced tomorrow's visit by Commission President Ursula von der Leyen to Croatia, where she is scheduled to meet with Prime Minister Andrej Plenković, when she will formally present him with the commission's decision to accept Croatia's Recovery and Resilience Program. Von der Leyen is also expected to participate in a session of the Croatian Government and to visit the Rimac Electric car manufacturer.

Source: HRT

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