Croatia

map Croatia
Despite high levels of inflation (averaging 8.4%), Croatia’s GDP grew by 2.5% in 2023. Solid household consumption amid rising real wages, a robust summer tourist season and the inflow of funds from the EU’s Recovery and Resilience Facility (RRF) all supported economic growth. The country’s introduction of the euro in January 2023, alongside its accession to the EU Schengen area, helped tourism: compared to 2022, visitor arrivals grew by 9% and overnight stays were up by 3%. We expect the economy to grow moderately in 2024, at a rate of 2.6%. Inflation will continue gradually to decline, but strong wage growth means that it will remain at above the euro area target, averaging 4% in 2024. The budget deficit is expected to widen somewhat to around 2% of GDP, due to higher public-sector wages and pensions, income-tax cuts and state aid measures that have been extended to April 2024. The extension of this aid package means that an additional EUR 1.7bn (2.5% of GDP) has been earmarked to provide support for households and local companies in managing rising food and energy bills and to promote investment in energy efficiency. Last but not least, Croatia is heading into an election-heavy year in 2024, with European parliamentary, local parliamentary and presidential elections all on the horizon. As a pre-election sweetener, the government is set to increase social spending, along with public-sector wages and pensions. Nevertheless, it is committed to maintaining sustainable public finances, which is why the fiscal deficit in 2025 should decrease to 1.7%.
        FORECAST*
Main Economic Indicators202120222023202420252026
Population, 1000 persons39493857....
GDP, real change in %13.86.32.52.62.73.0
GDP per capita (EUR at PPP)2284025820....
Gross industrial production, real change in %6.31.2-0.3...
Unemployment rate - LFS, in %, average7.67.06.86.76.66.4
Average gross monthly wages, EUR12751380....
Consumer prices, % p.a.2.710.78.44.03.02.0
Fiscal balance in % of GDP-2.50.1-1.0-2.0-1.7-1.6
Public debt in % of GDP78.168.2....
Current account in % of GDP1.0-2.8-0.30.21.01.3
FDI inflow, EUR m39523408....
Gross external debt in % of GDP80.873.3....


Basic data are continuously updated.

* Forecasts are changed beginning of January, April, July and November.
See Press Conferences.

publication_icon

Monthly Report No. 1/2024

Vasily Astrov, Alexandra Bykova, Rumen Dobrinsky, Selena Duraković, Meryem Gökten, Richard Grieveson, Doris Hanzl-Weiss, Gabor Hunya, Branimir Jovanović, Niko Korpar, Sebastian Leitner, Isilda Mara, Olga Pindyuk, Sandor Richter, Marko Sošić, Bernd Christoph Ströhm, Maryna Tverdostup and Adam Żurawski
wiiw Monthly Report No. 1, January 2024
50 pages including 5 Tables and 18 Figures

Details

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Executive summary

Branimir Jovanović
in: Beneath the Veneer of Calm
wiiw Forecast Report No. Autumn 2023, October 2023 , pp. I-VI
Details


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