Croatian National Bank has recently presented Projection of the monetary politics for 2020 and 2021, according to which the GDP has partially recovered in the third trimester of 2020, after it sharply fell down due to corona crisis.
However, unfavorable health situation in Europe could slow down the recovery and predictions for 2021 are given with a dose of reserve. Real GDP in 2020 fell by 8,9 percent in 2020 and revival of the economy is expected to spped up in the second trimester of 2021, accounting for around 4,9 percent in total for 2021.
Even though the employment rate could decrease by 1,5%, the Goverment has made a lot in terms of help to prevent mass discharges which keeps the labor market relatively stable.
Inflation rate was 0,2 percent in 2020 and is expected to increase to around 1% in 2021, mostly due to growth of prices of energy-generating products.
As Croatia entered ERM2 mechanism as the final step before implementation of euro, the National bank will keep defending stability of exchange rate and support low interest rates in 2021.