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WB revises upward Croatia's growth outlook for 2018 and 2019 

23.10.2017  11:26
Source: HINA
The World Bank has retained its forecast for Croatia's growth in 2017 at 2.9%, and has revised upward the forecast of the country's growth in the coming years at the average rate of 2.7%, according to the Bank's report on migrations and mobility, published on 19 October.
The bank assesses that Croatia's Gross Domestic Product will rise at a rate of 2.6% in 2018 and at a rate of 2.8% in 2019, as against the June forecasts of 2.5% and 2.6% respectively.
"Economic growth for the Europe and Central Asia region will reach 2.2% in 2017," according to the World Bank's latest Regional Economic Update, Migration and Mobility in Europe and Central Asia. This represents the strongest growth in the region since 2011, and is 0.3 percentage points above the Bank's previous forecast in May 2017.

As for Croatia, "economic growth strengthened to 3 percent in 2016 on the back of a record-high tourist season, accelerated private consumption growth, and a rebound of investment after six years of recession."
"Growth remained robust in the first half of 2017 at 2.7 percent, with household consumption as the main driver contributing 2.2 percent to growth, spurred by personal income tax rate cuts. Investment remained solid contributing 1.1 percent to growth, while government consumption contributed an additional 0.3 percent."

Analysts of the bank expect growth to remain at 2.9 percent in 2017, and keep the momentum thereafter standing on average at 2.7 percent in 2018-19, led by personal consumption and exports led by strong tourist performance.
"Personal consumption is expected to remain robust reflecting fiscal easing, labor market recovery, and increased consumer confidence. Export of goods is key in supporting growth, as firms further integrate in the EU market and external demand from main trading partners strengthens.

Investments will intensify benefiting from the EU funds absorption, especially public investment in infrastructure. "The fiscal deficit is expected to increase to 1.3 percent in 2017 as fiscal easing with tax reliefs and spending relaxation materialize. Spurred by growth, public deficit should decline afterwards to an average 1.0 percent in 2018-2019, which would lead to a further gradual public debt decline to 76.4 percent of GDP in 2019."
Positive labor market developments, with ILO-unemployment rate falling below 10 percent by 2019, are expected to support growth of disposable income for all segments of the welfare distribution.