EY expects Croatian economy to grow 1.7 pct this year, with inflation falling

The global consulting and auditing company EY estimates that the Croatian economy will grow by 1.7% IN 2023 , thanks to tourism and the IT industry, while inflation should fall.

In a statement released on Thursday, EY reported that it had conducted an analysis of the European economy during the first quarter of 2023 and said that the quarter saw a modest growth in European gross domestic product (GDP).

Long-term high energy prices and inflation, accompanied by a tightening of monetary policy, will continue to affect household consumption and economic growth. Thus, growth (GDP) in the eurozone should slow down to 0.7 percent this year, from 3.5 percent in 2022, according to the EY announcement.

It is added that in the eurozone IT, along with the pharmaceutical and electronics manufacturing and consulting sectors, achieves the best results, 19.2 percent more than before the pandemic.

"Croatian GDP still relies dominantly on strong tourism, and thanks to the record results predicted for this year, Croatia's GDP should grow by 1.7 percent in 2023," Berislav Horvat, Country Managing Partner at EY Croatia, said in a press release.

Although inflation will continue to be present in Croatia, it will slow down in 2023, and wages are expected to rise throughout the year and the unemployment rate will further decrease, which in February 2023 was 6.3 percent.

The press release states that in 2022, inflation in Croatia will exceed 13 percent, but financial trends show that it is decreasing.

EY predicts that inflation in Croatia will fall to 8.7 percent during 2023, which would still put Croatia in a slightly less favorable position compared to the eurozone, which is expected to maintain annual inflation at 6.1 percent.