Economic Forecasts : Outlook Bleak for Croatia
Croatia, the Western Balkan front-runner in the European integration process, will continue to suffer from economic decline in 2010, while Macedonia and Turkey - two other EU candidate countries - will already enjoy recovery this year, the European Commission said in its Spring economic forecast 2010-2011', issued on 5 May.
Croatia's GDP is expected to decline by 0.5% in 2010, says the EU executive, adding that although the worst of the current recession seems to be over for the country, there is no clear evidence that economic recovery has started to unfold. "The outlook for 2010 remains uncertain," says the report.
The global crisis severely affected the Croatian economy, which went into a deep recession. Real GDP declined by 5.8% in 2009, driven by a strong fall in domestic demand. Private consumption declined by around 8.5% and total investment by 11.8%. The strengthening of domestic demand is still questionable, according to the report, due to the slow recovery of domestic confidence. The effects of the recession on the labour market coupled with rising unemployment will continue to be felt in 2010, according to the EU executive. Croatia's budget deficit is projected to reach 4% of GDP in 2010 and 3.9% in 2011. The general government gross debt is predicted at 42.5% of GDP this year and 44.5% next year. The inflation rate is foreseen at 1.5% in 2010 and at 3% in 2011. The unemployment rate is expected to rise to 11. …