Macroeconomic Forecast Croatia

Though the eurozone may be slowly emerging from recession, led by France and Germany, we caution that the Croatian economy will continue to contract through the remainder of the year. Indeed, with eurozone consumers cutting back on tourism spending (which is major earner for the Croatian economy), and with domestic demand likely to remain subdued, we hold to our forecast 5.1% contraction in real GDP for 2009. Thereafter, a gradual improvement in both domestic and external demand conditions underpin our projection for an average annual rate of growth of 2.9% over the course of 2010-2013.

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