This report reviews key macroeconomic data and microeconomic developments for Croatia published between January 6 and February 6, 2014.
In the beginning of February, the European Commission kept its 2015 GDP forecast on Croatia, saying it anticipates it to grow by 0.2% only thanks to exports. At the same time, it lowered its 2016 growth forecast to 1% from the previous 1.1%. The EBRD also kept unchanged its outlook for Croatia, projecting a 0.5% growth this year. The World Bank also projected in January a 0.5% growth for this year, but the estimate was lowered from a 1.2% growth expected earlier.
S&P, which in January affirmed its long- and short-term foreign and local currency sovereign credit ratings on Croatia of “BB/B”, said it sees a 0% GDP growth this year.
The report also provides details on the latest development in the INA case between Croatia and Hungary's MOL. It mentions Croatia's improved ranking in the latest 2015 Index of Economic Freedom published by US-based Heritage Foundation. The report also reveals the latest plans of the government regarding the privatisation of Croatia Airlines and gives details on the International Court of Justice’s ruling regarding claims of genocide by Croatia and Serbia.

Key Points:

• Croatia's consumer prices fell by 0.5% y/y in December, after increasing for two consecutive months. The working-day adjusted industrial output rose 5.3% y/y in December, accelerating from a 2.8% annual growth the previous month. In the full year 2014, Croatia's industrial production went up 1.3%.
• The unemployment rate climbed to 19.6% in December from 19.2% in November. The average net monthly wage fell 0.2% in November following a 0.1% hike in October.
• January-October trade gap slightly widened to €5.9bn.