Croatia's economic growth is expected to slow down to 2.5% in 2020, from the medium forecast of 2.9% in 2019, a survey conducted by the Croatian Banking Association (HUB) showed on Thursday.

The expected slowdown is due to external factors and internal weaknesses, such as the lack of reforms, investment barriers, an inefficient state sector and unfavourable demographics, members of the HUB Club of Chief Economists said in the survey.

Kuna exchange rates are expected to remain the same as in late 2019, while public debt should continue decreasing approximately at the same rate as this year. Interest rates are expected to remain low.

Projections by the chief economists of four leading Croatian banks are in line with those of the International Monetary Fund and the European Commission. The IMF expects the Croatian economy to rise by 3% in 2019 and by 2.7% in 2020, while the EC has forecast Croatia’s growth at 2.9% in 2019 and 2.6% in 2020.

Those interviewed projected the public debt to GDP ratio at 72% this year, down from 74% in 2018, but slightly higher than the government’s forecast of 71%, HUB said.