Croatia’s economy on the rise, World Bank projects growth led by consumer spending and tourism

The World Bank has projected steady economic growth for Croatia, driven by robust consumer spending, tourism, and EU-funded initiatives. The Croatian economy is forecasted to expand by 2.7% in 2023, a projection underpinned by declining inflation and improved external conditions. This follows a strong first half of 2023, which saw an expansion backed by solid private spending and increased demand in travel services.

In addition to this, the World Bank forecasts that Croatia’s economic output will continue to rise steadily with an increase of 2.5% in 2024 and 3.0% in 2025. This growth trend comes on the heels of a real GDP growth recorded at 6.4% in 2022.

The bank also predicts a shift in Croatia’s fiscal position, with a GDP surplus of 0.4% recorded in 2022 expected to transition into budget deficits through to 2025. On the inflation front, rates are projected to fall from a high of 10.7% in 2022 to just 2.3% by the end of 2025.

Public debt is also expected to decrease as Croatia experiences steady growth and diminishing fiscal support needs, which should help contain deficits and lower public debt. Despite these positive projections, the overall regional growth still lags behind pre-pandemic figures.

In other parts of the region, recovery is anticipated in Ukraine—with a projected growth of 3.5%—and Central Asia, where a rise of 4.8% is expected amid moderating inflation and resilient consumers in Türkiye due to reduced policy uncertainty.

However, despite an uptick in military spending leading to unexpected growth in Russia, consumer demand is slowing down. Meanwhile, countries such as Armenia and those in the South Caucasus continue to show strong performance, while growth in the Western Balkans is beginning to slow.

Antonella Bassani, presumably an official or economist associated with the World Bank, advocates for innovative strategies to boost economic resilience across these regions.

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