The International Monetary Fund (IMF) revised down its forecast for Croatia's GDP growth in 2021 to 4.7 percent in a report published on Tuesday. They added that they expect economy to pick up and a return to its pre-pandemic level in 2022.

Croatia’s GDP shrank 9.0 percent in 2020, the IMF said in its World Economic Outlook, reaffirming its forecast from last autumn. After 4.7 percent GDP growth in 2021 (revised down from earlier 6.0 percent forecast), GDP is expected to increase by 5.0 percent in 2022.

The IMF included Croatia among the emerging European economies that are expected to record the highest growth rates this year and the next.

This year, only Turkey and Romania are projected to achieve higher growth rates, of 6 percent, and Serbia’s economy is expected to grow at a rate of 5 percent. Next year, a higher rate is forecast only for Hungary, of 5.7 percent.

Projections of current account deficit and unemployment revised down

Croatia’s current account deficit is forecast at 2.3 percent of GDP this year, which is 0.8 percentage points lower than in the October report.

In 2020 the current account deficit was 3.5 percent, up by 0.3 percentage points from the autumn report, while in 2022 it is projected to drop to 1.6 percent.

The unemployment rate for this year is forecast at 9.4 percent, down from 10.3 percent projected last autumn. In 2020, the rate was 9.2 percent and in 2022 it should slide to 9.0 percent.

In 2021, consumer prices are expected to increase by 0.7 percent, compared to 0.8 percent projected in October. In 2020, the inflation rate was 0.3 percent as forecast in October, while in 2022 consumer prices are expected to pick up to 1.2 percent.