Croatia's economy is likely to contract by 8.9% this year and to rebound by some 5% in 2021, according to the latest forecast by the national bank HNB.

Presenting the central bank’s projections on Thursday, HNB Governor Boris Vujcic said at a virtual news conference that the modest recovery in Q4 2020 and the unfavourable epidemiological situation would make the recovery of the whole economy slower.

In October, the HNB projected a downturn of 8% for this year, and a positive rise of 5.2% for 2021.

Vujcic said that business and consumer sentiments continued to stagnate or fall. “Therefore we expect the recovery in Q4 to be slower than we previously predicted,” he said.

In 2021, the positive rise of GDP is expected to be driven by household consumption and growing exports owing to a rise in exports of services, Vujcic said, explaining that the 2021 tourist season should be much better than this year’s, but would not yet reach the volume of 2019.