Macroeconomic Forecast Croatia

According to the Croatian National Bank, Croatia's current account deficit came in at EUR1.77bn in Q309, down from EUR1.92bn in Q308. This brings the cumulative deficit through January-September to EUR0.92bn, implying a 62.7% y-o-y decline from the EUR2.45bn shortfall posted in the same period in 2008. The narrowing of the shortfall came chiefly from the decline in imports, which continued to outpace that of exports. We estimate the deficit to have reached EUR2.46bn by end-2009, constituting 3.6% of GDP, down from 6.6% in 2008. Going forward, we expect the deficit to narrow further in 2010 to 3.4% of GDP.

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