Macroeconomic Forecast Croatia

We forecast the Croatian kuna to end the year at HRK7.5500/EUR in 2012 and HRK7.45/EUR in 2013. The kuna is likely to experience continued appreciatory pressure in the summer months as strong foreign tourist arrivals and relatively robust demand for local debt keep demand for the unit elevated. However, moving into the fourth quarter, we expect the unit to come under selling pressure as balance of payments dynamics take hold, whereby weaker exports weigh on the kuna’s performance.

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