The European Commission (EC) has published its autumn economic forecasts, confirming that Croatia will be in the group of countries with the highest GDP growth rates in the entire European Union (EU). The EC increased its expectations of Croatian GDP growth to 2.6% this year and 2.5% next year, which is somewhat less optimistic than the Croatian Government’s predictions. This year, the EC is predicting faster real growth only for Malta (4%), while next year, the economies of four more EU Member States should grow at a more rapid pace: Ireland, Poland, Romania, and Cyprus and Malta.
The average inflation in Croatia will be above average, both in relation to the average of the entire Eurozone and in relation to all 27 EU nations. The EC also expects that the internationally comparable inflation rate (HICP) in Croatia this year will stand at 8.1%, which is 2.5 percentage points higher than the rest of the Eurozone. The inflationary gap should finally „melt” next year. At the level of the Eurozone, the average inflation rate is expected to slow down from 5.6 to 3.2%, while for Croatia, it is forecast to drop to 2.5 percent. In this sense, the EC is somewhat more optimistic than the Croatian Government, which based its recent budget projections on an expected inflation rate of 3.1%.
Croatian economists have expressed reservations in terms of the underestimation of official inflation and the GDP deflator, and the possible overestimation of the real growth rate. Economic activities for which Croatia has already had „hard” indicators and a relatively clear division of the actual level of activity and prices are mostly in decline this year, while those that are more difficult to measure are growing strongly. The State Bureau of Statistics (CBS) is on track to release its first GDP estimates for the third quarter at the end of this month.