Croatia's GDP is set to rise to 6.3% in the real terms in 2022 and to slow down to +1.4% in 2023, whereas the country's inflation rate is likely to reach 10.5% this year to slow down to 7.5% next year, the Croatian Central Bank (HNB) said at its news briefing on Monday.

Thus, the central bank’s growth projection for 2022 has been revised upward from the previous projection of 5.5%, presented in mid-October, when the central bank projected one percent growth for 2023.

Also, the previous inflation forecast stood at 10.3% in 2022 and 6.7% in 2023.

The HNB explains that a weakened global growth outlook and pronounced inflation pressure have made central banks adopt more stringent monetary policies worldwide. These developments, coupled with worsening conditions for financing, are having more and more impact on Croatia’s economy.

In the Q3 of this year, Croatia’s economy experienced a mild deceleration with a growth rate of 5.2% and this deceleration is expected to continue in the last quarter of 2022.

The bank forecasts that GDP could resume an ascending line in the second half of 2023, and the growth rate for the whole of 2023 is estimated at 1.4%.

The inflation rate for 2022 is set at 10.5% due to energy and raw materials price hikes and disruptions in the global supply chains.

The imported inflation is expected to gradually subdue and therefore in 2023, the inflation rate is likely to be 7.5%