Macroeconomic Forecast Croatia

Despite faring well against the global financial crisis, Croatia is nonetheless set to endure a deep recession in 2009 as the weakening of domestic demand catches up with the deterioration in international trade. The Tourism sector, in particular, will suffer considerably this year as consumers in the eurozone tighten their belts in response to the unfolding recession. As such, we forecast real GDP to contract by 3.2% this year, with a return to positive (albeit modest) growth of 1.0% in 2010. Moreover, with real convergence gains still be to made with the EU, we expect growth to exceed 3% by 2011 and to peak at 3.9% in 2012.

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