In 2023 Croatia's economy will grow by 2.7%, considerably above the euro area average, show the International Monetary Fund's (IMF) regular autumn forecast, published on Tuesday.

In June 2023, the IMF forecast in its regular Article IV consultations a 2.4% activity growth this year. In its regular spring forecast for the global economy in April, it estimated that economic activity would grow by 1.7%.

The latest estimate is for the most part in line with the estimate of autumn 2022.

According to the latest forecast, in 2024 the Croatian economy should grow by 2.6%, 0.3 percentage points more than forecast in April.

The inflation estimate for this year has been raised from the 7.5% forecast in June to 8.6%. In 2024 prices are expected to grow at half the pace, at a rate of 4.2%. According to the April forecast, inflation was expected to grow by 3.6%.

The IMF has considerably lowered its estimate of the current account deficit for this year, to 0.2%. According to the latest estimate, the current account deficit in 2024 is expected to be at 0.4%. The April estimate set the current account deficit at 1.8% for both 2023 and 2024.

The unemployment estimate for this and next year has been mildly lowered, by 0.1 percentage point each. The new calculations show that this year the unemployment rate should stand at 6.3% and in 2024 at 5.9%.

Lowered estimate for euro area

The economy of the euro area is expected to grow this year by only 0.7%, the IMF has estimated, lowering the growth estimate from its summer forecast by 0.2 percentage points.

IMF summer reports consist only of forecasts for the global economy and large economies and regions.

In 2024 economic activity in the euro area should grow by 1.2%, 0.3 pp less than forecast in the summer report.

Germany is the only economy in the euro area that is expected to see a decline in economic activity this year, of 0.5%. In 2024 it is expected to recover, with an estimated growth rate of 0.9%.

Among the large economies, Spain is the one expected to grow the most this year, by 2.5%. In France economic activity is expected to grow 1% this year, and Italy is expected to follow the euro area average.