ZAGREB, 10 Feb 2022 - The European Commission on Thursday significantly revised up its forecast for Croatia's economic growth in 2021 to 10.5%, which is the second-highest growth rate in the European Union after Ireland, while downgrading its projections for this year and next compared to its autumn outlook.

The European Commission released its Winter Economic Forecast on Thursday, saying that the Croatian economy achieved a full V-shaped recovery in 2021, surpassing the level registered prior to the 2019 crisis.

After a fall of 8.1% in 2020, the Croatian economy is estimated to have grown by 10.5% in 2021. The only other EU member state with faster growth is Ireland, with a rate of 13.7%.

In its autumn forecast, released in November 2021, the Commission projected Croatia's growth for last year at 8.1%.

As far as inflation is concerned, it is forecast at 2.7% for 2021, 3.5% for 2022 and 1.6% for 2023. These figures are at the level of the euro area average and slightly lower than in the EU overall.

The Commission expects the Croatian economy to grow at a rate of 4.8% this year (compared to 5.6% forecast last autumn) and at 3% next year (the autumn forecast was 3.4%).

After strong growth in the second and third quarters of 2021, growth is expected to have slowed down in the fourth quarter based on short-term indicators of economic activities and price increases.

Exports of commodities and services contributed to the recovery, with tourism playing a key role as well as personal consumption.

Although a strong increase in demand for finished products led to a growth of imports, the contribution of net exports to growth will remain positive.

Investment is also expected to increase, reconstruction should be stepped up after the earthquakes in Zagreb and the Banovina region, as are favourable financial conditions and the implementation of the National Recovery and Resilience Plan (NPOO).

The revised budget indicates that government spending will make a positive contribution to this year's growth.

The risk balance is slightly tilted to the downside, mainly due to problems in implementing projects following the earthquakes. which could negatively affect investments.

This year, inflation could be 3.5% compared to 2.7% last year, mostly due to increased commodity prices. The high inflation rate in the first half of the year is expected to slow down in the rest of the year. Inflation will be most affected by prices of energy and unprocessed food. It is expected to fall below 2% in 2023.

The Commission estimates that after a growth of 5.3% last year, the EU economy will grow at a rate of 4% this year and 2.8% next year. Growth in the euro area is forecast at 4% in 2022 and 2.7% in 2023. The EU as a whole reached pre-pandemic levels in the third quarter of 2021 and all member states are expected to return to pre-pandemic levels before the end of 2022.

June the 12th, 2021 - Croatian export results are looking promising so far this year, with the first four months of 2021's results overtaking those from pre-pandemic 2019. It's no surprise that the pharmaceutical industry has done exceptionally well.

As Poslovni Dnevnik/Marija Brnic writes, it was expected that Croatian export results would be higher in March and April than they were last year, when the economy in all major markets stopped due to the lockdown and trade flows were interrupted. However, the latest preliminary data from official statistics show something unexpected - that a record export year has begun in Croatia.

In the first four months of 2021, Croatian producers placed 5.5 billion euros' worth of products on foreign markets, which is more, even on an annual level, than was achieved in the hitherto record 2019 export year. At that time, the cumulative Croatian export results in those four months was 4.9 billion euros. Last year, 4.6 billion euros were exported in the first four months.

When it comes to precisely which sector of production and which markets deserve the most credit for this step forward, more can be read from more detailed data that will be published by the Central Bureau of Statistics in around one month, but from that data processed for the first quarter of 2021, it can be inferred that pharmaceutical production, unsurprisingly given the public health crisis, did the best.

Their results in the first quarter was as much as one third better than they were last year, and double-digit growth rates were also recorded by wood processors, the agriculture sector, exporters of electrical equipment, rubber and plastic products, and the metal industry. In fact, it is simpler to list those who had a negative export score - the textile, automotive, shipbuilding, chemical and refined petroleum sectors/products.

INA's crude oil, which even before the coronavirus pandemic began being exported to Hungary for processing in the MOL refineries, should be added to the previous list of exporters who have made great strides forward, thanks to which Hungary has entered the ranks of the most important Croatian export markets.

According to state statisticians, Italy has regained its leading position on the Croatian export list, which it lost during the pandemic, and is again ahead of Germany after one year.

In the first three months of 2021, 22.5 percent more was exported to Italy than in the same period last year, a total of 520 million euros, about 8 million euros more than to Germany, which also recorded a better export result (5.5%). In total, the Croatian economy exported goods worth 4 billion euros in the first quarter of this year (8.6% more than it did in the first quarter of 2019).

For the first time in a long time, exports to Austria also increased, and among EU member states, when compared to last year, producers had a weaker result only with sales to Belgium, Luxembourg, Estonia, Portugal and Romania.

An increase in exports and as such Croatian export results was also finally realised on the neighbouring market of Bosnia and Herzegovina, although the country was overtaken by Hungary for the first time, thanks to INA and MOL.

Croatia's 72 percent annual growth in Croatian exports is also interesting because at the EU level, exports to the United States had a negative trend in the first quarter, falling by 4.5%, reflecting trade tensions and tariffs imposed by the transatlantic partners during the former Donald Trump administration.

Pliva and the Karlovac arms manufacturer HS Produkt contributed the most to the growth of exports to the USA. If we compare the statistical indicators, the record year for Croatian exporters was 2019, this year in the first three months 158 million euros were exported, but at the same time, back in pre-pandemic 2019, the result was as much as 192 million euros.

This slow but steady global recovery will also contribute to the good trend in the placement of Croatian goods on international markets, especially in the Eurozone, where Croatia's most important foreign trade partners come from.

For more, follow our business section.

May the 9th, 2021 - Croatian producers have managed to deliver an excellent result in 2021's first quarter, recording record export figures and surprising growth of 9.5 percent.

The ongoing coronavirus pandemic is continuing to throw proverbial spanners in the works for almost everything imaginable, and the global economy is suffering tremendously and in a truly unprecedented way. The Croatian economy, which relies heavily on tourism as it makes up a huge amount of the country's GDP, has been far from immune from the negative trends caused by the measures introduced to try to prevent the spread of the novel virus.

Croatian producers, particularly exporters, have been as plagued by the virus and intermittent lockdowns as the vast majority of other sectors across Croatia and Europe, but 2021 has managed to bring with it some surprising and encouraging results which might well mean that things are finally on the up again.

As Poslovni Dnevnik writes, in the first two months of 2021, Croatian exports were down 1.4 percent (when looking at it from the perspective of the Croatian kuna) and 2.8 percent in euros on an annual basis.

2021's first quarter also saw a significantly more favourable ratio between the value of exports and imports, as the coverage of imports by exports improved significantly and amounted to 64.6 percent. In the first quarter of last year, the ratio stood at a lesser 60.3 percent.

The more favourable ratio is a direct result of slower growth in imports, which was 2.1 percent higher in Croatian kuna and 0.6 percent higher in euros. Since this is the first data without details on the structure to have been made available, there is no precise data on what contributed most to this promising export jump, and it can only be established that growth also took place on most important single market (7.3 percent in euros), and to a somewhat stronger scale outside of the single market (9.2 percent in euros).

In absolute numbers, in the first three months of 2021, the Croatian economy exported products worth 30.0 billion kuna, or 3.97 billion kuna. 46.48 billion kuna or 6.15 billion euros worth of goods were imported, which is a record result for that particular period.

For more on Croatian producers, exporters and figures, make sure to follow our dedicated business section.