EC confirms expected two-digit growth

The European Commission has confirmed with its Winter Economic Forecast the Croatian government's expectations of a two-digit growth in 2021, which means that the results "are far above the initial expectations," Prime Minister Andrej Plenković said on Thursday.

"The European Commission confirms that it is likely that we had a two-digit economic growth in 2021," he said at a cabinet session.

He said it was "very good" that GDP was back at the pre-pandemic level.

After a fall of 8.1% in 2020, the Croatian economy is estimated to have grown by 10.5% in 2021. The Commission expects the Croatian economy to grow 4.8% this year (compared to 5.6% forecast last autumn) and 3% next year (the autumn forecast was 3.4%).

According to the Commission's forecast, released today, with a GDP growth of 10.5%, Croatia would be the second fastest growing economy in the EU in 2021 after Ireland, whose growth is forecast at 13.7%. The EU growth is forecast at 5.3%.

Plenković said the forecast was "an encouragement." "We'll see the forecast by the Croatian Bureau of Statistics at the end of the month, but we can expect the highest growth Croatia has ever had."

He said Croatia's recovery in 2021 was supported by the export of goods and services, and that in the first 11 months of last year Croatia had the highest goods export growth in the EU after Greece and Estonia.

The prime minister highlighted the good tourist season and stronger personal consumption.

For 2022, he expects "a continuation of the dynamic growth" at 4.8% thanks to favourable developments on the labour market, relatively mild COVID restrictions, and investment growth following a growth in demand, accelerated post-earthquake reconstruction, and the implementation of the National Recovery and Resilience Plan.

He said it was important that the Croatian GDP growth forecasts for the three years in question were above the EU GDP average. "For the period of 2021-2023, Croatia would have the second highest real growth rate among EU states, of 19.3%, just after Ireland's 25.4%."

The EU GDP in that period is forecast to increase 12.6%.

Text: Hina

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