Structural Funding to Push Croatian Growth
- New Europe Investor
- November 07, 2015
The European Commission has pushed its growth forecasts higher for the Croatian economy.
It has raised the 2015 growth forecast from 0.3% in May to 1.1%. This is broadly in line with the Croatian National Bank, who recently raised their expectations from 0.5% to 1.2%.
In addition, the Commission said that growth for next year could be 1.4%, followed by 1.7% in 2017. They added that the relatively high 1.7% growth for 2017 would be largely down to better withdrawal of EU funds.
The Croatian economy just emerged this year from six years of continuous recession. 12% of the economy’s GDP has been lost over this time.
Concerns were raised in the report about the high level of public debt, currently at 89%, but estimated to reach nearly 93% by 2017.
The budget deficit remains above the target level of 3%, and the Commission does not see this improving despite the positive economic trend. There are deep structural reforms necessary in the Croatian economy in order for these figures to be reduced.
Unemployment in Croatia will fall in the coming years, but will still be amongst the highest in Europe. The Commission predicts 2017 unemployment will be 15.6%. At the beginning of 2015, the rate of unemployment was over 20%.