The chief economists of Croatia's five largest banks have upgraded Croatia's economic growth forecasts for this year to 3% and expect it to decrease to 2.5% in 2020, according to a Croatian Banking Association (HUB) outlook report published on Monday.

The economists revised upwards their forecasts for this year after GDP grew 3.9% in Q1, which ranked Croatia sixth in the EU after Hungary, whose GDP in Q1 went up 5.2%, Romania (+5.1%), Malta (+4.8%), Poland (+4.7%) and Estonia (+4.6%).

The mean forecast for this year was revised to 3% after the 2.6% growth forecast last December. The latest forecasts ranged from 2.8% to 3.2%.

The mean forecast for 2020, of 2.5%, is tied to lower contributions from all components of aggregate demand in comparison with forecasts for 2019.

The growth should still suffice for unemployment to continue to decrease below 7%, with real salary growth to 1.4%, mildly slower due to inflation. The public debt-to-GDP ratio is expected to stay below 70%.

The biggest hurdles to growth are the unreformed institutional framework, tax and similar burdens, and the lack of foreign direct investment.

The five economists said it was very likely the global economy would slow down at the end of this year and early the next.

Asked when they expected Croatia to introduce the euro, two said in 2023, two in 2024 or 2025, and one in mid-2024.