Some good news for the Croatian economy?
Long-term economic growth for Croatia requires education, health and infrastructure reforms.
As Poslovni Dnevnik writes on the 10th of January, 2018, in the latest global economic outlook, the World Bank expects the Croatian economy to grow by 2.6 percent in 2018, confirming its updated estimates from October last year.
This is a slowdown compared to 2017, for which the World Bank estimated it would end up with a GDP growth rate of 3 percent by the end of the year. As far as 2019 is concerned, the World Bank expects Croatia's economic growth to slightly re-accelerate to 2.8 percent.
The World Bank's latest estimate of growth for Croatia's economy this year by 2.6 percent is slightly lower than numerous estimates provided by other institutions.
The European Commission has announced in its recent forecasts that in 2018 it expects the Croatian economy to grow by 2.8 percent, and the International Monetary Fund (IMF) expects 2.7 percent growth.
This year, the Croatian National Bank (HNB/CNB) has stated that it expects the economy to grow by 2.9 percent, while the government's budget for this year is being based upon on a 2.9 percent economic growth estimate.
In the latest outlook, the World Bank expects global economic growth of 3.1 percent this year, a slight acceleration compared to 2017, estimated to have ended with a growth rate of 3 percent. In 2019, a global growth rate of 3 percent is expected.
The World Bank notes that 2018 is on its way to being the first year of the financial crisis in which the global economy should function at or very near to full capacity. However, the report warns that this is set to be short-lived, with the improvement of living standards and the reduction of poverty at risk in the long-run.
As noted, legislators will need to look for tools and methods to stimulate short-term growth beyond the monetary and fiscal policy tools, and consider initiatives that could stimulate the long-term potential of the economy.
"A wide-ranging recovery in global growth is encouraging, but there is no reason to be content with complacency, and it's a great opportunity to invest in human and physical capital. If legislators around the world focus on these key investments, they can increase the productivity of their countries, strengthen labour force participation and get closer the goals of abolishing extreme poverty and strengthening common prosperity, "said World Bank President Jim Yong Kim.
Governments should therefore promote reforms to improve education, health services and infrastructure such as roads, ports, electricity supplies and telecommunications networks. Namely, healthier and better educated labour is likely to be more productive, while better infrastructure for entrepreneurs also increases overall productivity.
