Page 36 - SE Outlook Regions 2022

Gross foreign debt (% of GDP) 94.5 87.2 80.8 72.4 79.8

EUR/LC (avg) 7.5 7.5 7.4 7.4 7.5

USD/LC (avg) 6.8 6.6 6.3 6.6 6.6

Source: DZS, Central bank, IMF, World Bank

2.4.1 GDP growth

After falling by more than 8% in 2020 due to the coronavirus
(COVID-19) pandemic, Croatia’s economy recovered better than
expected in the first three quarters of 2021, mainly thanks to the strong
summer tourist season. According to statistics office data, the GDP
expanded by 15.8% y/y in the third quarter, while growth stood at
10.7% y/y in the first nine months of 2021.

Plenkovic commented that this growth was the biggest ever since the
country has existed (though clearly the low base was a major factor).

According to Croatia’s government, economic growth is expected at
4.4% in 2022, down from 9% projected for 2021. In 2023, the economy
should expand by 3.7%, and in 2024 by 3.1%.

The European Commission projected in its autumn economic forecast
that the economic growth in 2021 would reach 8.1% thanks to strong
private consumption and the better than expected summer tourist
season.

Government consumption should support the economic growth
although its contribution is expected to decline. Investment is seen
rising, supported by the Recovery and Resilience Facility (RRF), the
previous and current Multiannual Financial Frameworks and the
Solidarity fund disbursements to support post-earthquake
reconstruction.

The EC expects that GDP will rise by 5.6% in 2022 and by 3.4% in
2023. The volume of GDP should reach its 2019 level during 2022.

36 SE Outlook 2022 www.intellinews.com