In the latest projection released by the International Monetary Fund (IMF) on Tuesday the forecast for Croatia's 2022 GDP growth was cut in half, from the earlier estimate of 5.8 percent in October to only 2.7 percent. IMF's analysts attributed this to the effects of the ongoing war in Ukraine and also the rising inflation.

In 2023, Croatia’s GDP is expected to grow by 4.0 percent. Last year it grew by 10.4 percent, which was 4.1 percentage points more than the IMF forecast from October 2021.

Croatia’s inflation in 2022 is now projected to be in the range from 2.0 to 5.9 percent. In 2023, it is expected to fall to 2.7 percent, returning to 2021 levels. Croatia’s 2022 current account deficit forecast was also halved to 0.4 percent of GDP. In 2023, a 0.3 percent surplus is projected.

The IMF has reduced the forecast for this year’s unemployment rate from 8.0 to 7.7 percent. In 2023, the rate is projected to drop to 7.4 percent. In their latest outlook, the IMF estimated that Croatia’s unemployment rate was 8.2 percent in 2021.

In terms of the wider region, the IMF projects that due to the war in Ukraine this year’s economic activity in “emerging and developing European economies” – which includes Croatia – would drop 2.9 percent. This is significantly down from the previous forecast from October 2021, when their analysts projected a 3.6 percent growth. In 2023, the region’s combined GDP is projected to grow by 1.3 percent.

Within that grouping, economies of Poland and Hungary are projected to post largest growth rate, forecast at 3.7 percent each. They are followed by Serbia, whose GDP is set to grow by 3.5 percent in 2022.