Croatia: Raiffeisen Bank analysts are more cautious about GDP growth

Contrary to the central bank and government optimism for the recovery dynamics in 2021, which ranges between 8.5 and 9 percent, Raiffeisen Bank (RBA) analysts are still somewhat more cautious with the expectation that GDP growth will stop at 7 percent. .

“Our estimates are significantly lower than those of the government because we expect a slowdown in the last quarter of the year,” said RBA chief economist Zrinka Zivkovic Matijevic in presenting the latest RBA research.

She adds that the “risks” for the forecasts are on the positive side, which in the case of their realization significantly approaches those forecasts.

The summer quarter, due to a good epidemiological situation and a surprising season that brought in 8.5 billion euros in inflows (85 percent of the 2019 level), could end with a double-digit growth rate.

However, on the side of the rapidly deteriorating epidemiological situation with the end of the year approaching, the withdrawal of “parking brakes” in terms of optimism is a reflection of the uncertainty of energy and raw material prices, as well as outages. in supply chains. However, Croatia’s real economic recovery, and indeed growth throughout 2021, will remain strong, driven mainly by increased exports of services, namely tourism and personal consumption.

Next year, domestic economic growth should attract investment in the European Union (EU) money-making arms under the much-discussed National Recovery and Resistance Plan.

“From a macroeconomic point of view, investments are a desirable generator of growth,” said Zivković Matijević, explaining that the benefits of a generous injection of European Union money outweigh the availability of money itself, as their withdrawal depends on measures and reforms that. will work to reduce the weaknesses of the domestic economy in the long run, and whose contours are slowly emerging.

News of Croatia’s economic recovery and accelerating economic momentum has recently been overshadowed by inflation, which accelerated to 3.3 per cent in Croatia in September (compared to 4.1 per cent in the Eurozone), which is expected to peak there. the first. next year quarter.

“Inflationary pressures continued to intensify, mainly due to the strong rise in energy prices, thus reflecting developments in world crude oil exchanges. “Since the second half of the year, energy prices have been joined by rising food prices,” they added from the RBA.


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