Real GDP in Croatia will jump by 5.3% in 2021, the European Commission announced in its winter forecasts. Stronger growth in domestic consumption is also expected in line with the growth of population vaccination. The expected growth of the Croatian GDP in 2022 is 4.6%, the Commission predicts.
The services and exports sector, which includes tourism, will depend on the overall recovery in the environment, and for Croatia the Commission predicts slower growth in tourism and exports in 2021 and 2022. It is realistic to expect that the tourism, travel and hospitality sector will recover more slowly everywhere in Europe.
The Commission also expects an improvement in the labor market. Investment growth, especially in the construction sector, will strengthen in part due to reconstruction following the effects of earthquakes in Banovina and Zagreb. The Commission expects increased interest in long-term investment projects.
These winter forecasts do not include incentives and measures that will be available to countries from the Mechanism for Recovery and Resilience, from which Croatia expects almost 6 billion euros in grants and 4 billion euros in the form of very favorable loans.
Prime Minister Andrej Plenković: An encouraging message for Croatia
“The estimated GDP growth of 5.3 percent for Croatia is above the EU average, for which the Commission forecasts growth of 3.7 percent, and this is the best forecast behind France and Spain,” Said Prime Minister Plenković when commenting on the latest forecasts by the European Commission.
Those forecasts are, as he said, an "encouraging message" because the decline in GDP in 2020 is smaller than expected, and the forecast for 2021 is among the three countries with the highest projected growth. In addition, he noted, the EC predicts Croatia's GDP growth of 4.6 percent in 2022, and 3.9 percent for the entire EU.
"We believe that these estimates are in line with those of the Government and the Ministry of Finance and are in a way expected, but at the same time encouraging given the year ahead," said Plenković.
Forecasts for the entire European Union
Europe is shackled by the COVID pandemic, which, together with the emergence of new mutations and strict isolation measures, is having a negative impact on economic growth throughout the European Union, according to the European Commission's winter economic forecasts. Overall, the European economy will therefore grow by 3.7% in 2021 and 3.9% in 2022. Exiting the crisis is linked to fighting the epidemic.
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