Macroeconomic Forecast Croatia

Croatia will avoid recession despite the current economic downturn. We are currently forecasting real GDP growth to slow from 3.3% in 2008 to 2.1% in 2010. This is in line with central ban forecasts. The slowdown in consumer and investment spending will help to keep the current account in deficit in check despite a projected slowdown in the tourist sector as disposable income in western Europe falls. Indeed, we expect 2009 to see the peak of the external deficit, and the shortfall to shrink thereafter.

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