Croatia's Gross Domestic Product is set to have increased to 3.3% in the last quarter of 2023 on the back of rising consumption, higher investment rates and stabilising industrial output, the Croatian Employers' Association (HUP) says adding that that the growth for the entire 2023 could be 2.6%.

Croatia is thus among top EU countries in terms of the growth in 2023, owing to a robust market and a sort of consumption boom, the HUP main economist Hrvoje Stojić said in the association’s publication “Fokus” released recently.

HUP forecasts Croatia’s GDP rate for 2024 at 2.5% .

After the growth of 2.8% in 2023 Q3, Croatia’s economy is likely to have expanded at a rate of 3.3 due to a 7.6% rise in retail trade and the recovery of industrial production by 1.6% after it declined by 0.5% in the third quarter of 2023, says the HUP.

Inflation to wane to 3% in coming months

The association projects that after the slow-down of the country’s inflation rate to 4.1% in January 2024, the inflation is likely to further ease to about 3% before this summer.

Although inflation is waning, this does not mean that its growth is being checked, having in mind a 6% real rise in wages, the increase in the wage budget in the public sector and steady rise in revenues in the services sector..

The association calls for a constructive dialogue on reduction of differences of energy prices for companies and households within the future design of the electricity market, considering wholesale prices of gas and electricity in comparison to the pre-crisis period and a potential jump of the energy spot prices due to geopolitical risks and a possible recession in the euro area in the first half of 2024.