Croatia: GDP expected to nosedive

Croatia: GDP expected to nosedive

The contraction of Croatia’s economy in the second quarter of 2020 is likely to be worse than its biggest decline during the global financial crisis, said Finance Minister Zdravko Marić on Wednesday, ahead of the release of the official data scheduled later this week.

The national statistics office is expected to release the latest GDP figures on Friday.

Responding to questions from the press, Marić said the government would present a new forecast for the whole year sometime in the first half of September.

“We expect a drop, a bigger quarterly drop than the one that we had during the last financial crisis.  You can expect a clearer picture of what the year will be like as a whole in the first or second week of September, when the government will present its latest projections”, Marić told reporters as he headed into a cabinet meeting.

The largest drop in the GDP to date, 8.8%, was recorded in the first quarter of 2009, at the start of the global financial crisis.

Six analysts told HINA they expected the economy to contract 13.9% year-on-year. This will be the first drop in GDP since mid-2014 and the largest since 2000.

Marić said the government had propped up the economy this year with measures aimed at preserving jobs, but added that this could not be done indefinitely.

New programs are being launches, such as the EU’s SURE program, from which Croatia is expected to receive €1 billion in affordable loans which will most likely be used to finance a shorter working week.

Marić said Croatia fared even better with the Next Generation EU instrument, the coronavirus recovery plan from which the country will be given €9.4 billion. He said the big challenge now was to draw the largest amount possible as quickly and as effectively as possible. /ibna