The International Monetary Fund (IMF) said that 2018 marked Croatia's fourth year in a row of economic growth and fiscal consolidation, but also called for further improvements to the country's business climate and a more rational management of public companies, as well as bankruptcy legislation.

“The economic expansion continues, driven primarily by private consumption and exports of goods and services,” the IMF said in a press release published on Wednesday.

The report, signed by IMF’s Executive Directors, welcomes “Croatia’s continued economic recovery, which has helped further reduce indebtedness and build external buffers.”

“Over the next few years, growth is expected to moderate, as the economy moves closer to its potential. The current account is projected to decline but remain in surplus, while external indebtedness is expected to continue to decline,” the report said.

After a 2.7 percent growth in 2018, Croatia’s GDP is likely to grow by 2.6 percent in 2019, according to IMF estimates.

“Fiscal performance has been strong, but the materialisation of contingent liabilities from government guarantees is likely to reduce the overall surplus. Low public and private investment, and continued emigration weigh on medium-term growth prospects. Downside risks in the near-term stem from possible changes in regional or global economic and financial conditions, and the further realization of contingent liabilities,” IMF said.

The IMF highlighted “the need to improve the business environment by further reducing administrative and tax burdens,” and said it welcomed “recent initiatives to reduce parafiscal fees.”

The IMF directors advise “rationalising the state-owned enterprise sector, divesting under-utilized state assets, and improving the efficiency of legislative and judicial processes.”

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