EU Commission improves Croatias 2024 GDP growth fcast
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Subscribe here: https://bit.ly/eudebates The European Commission said on Friday it has increased its growth forecast for Croatia's economy in 2024 to 3.6% from 3.3% it projected in May, • Growth is expected to be mainly driven by private consumption, boosted by strong real wage and employment growth, and sustained investment, the European Commission said in its Autumn 2024 Economic Forecast. Croatia's economy expanded by 3.3% real last year. • Government consumption is also set to rise, mainly due to a public sector wage reform that resulted in a large one-off increase in wages. Investment is expected to remain strong, also supported by a further acceleration in expenditure funded by the Recovery and Resilience Facility (RRF), the Commission said. • Exports of goods are forecast to rebound solidly, despite relatively weak demand growth in Croatia’s main trading partners’ economies. However, exports of services, mainly tourism, are projected to decline in real terms, largely due to persistent significant price increases of touristic services. Overall, the contribution of net exports to growth is expected to turn negative, in a context of strongly expanding domestic demand, according to the report. • The Commission expects GDP growth to slow down to 3.3% in 2025 and 2.9% in 2026, as consumption growth moderates on the back of slower wage increases. • The EU's executive body also projected that Croatia's general government deficit will rise to 2.1% of GDP in 2024, from 0.9% in 2023, due to the increased wages and social benefits. • In 2025, the deficit ratio is forecast to remain at 2.1% of GDP. The government extended some of the measures to mitigate the impact of high energy prices until March 2025, with an expected budgetary cost declining from 0.9% of GDP in 2024 to 0.1% in 2025, thus improving the structural balance, the Commission said. The deficit is forecast to narrow to 1.9% of GDP in 2026, as expenditure, mainly spending on wages and nationally financed investments, grows more slowly than revenue, it explained. • The Croatian government approved on Thursday the 2025 draft budget, targeting a deficit of 2.3% of gross domestic product (GDP), up from 2.1% expected this year. It assumes real economic growth of 3.2% next year, down from a projected increase of 3.6% this year. • Stay connected with us! • Facebook: / eudebates.tv • Twitter: / eudebates • Instagram: / eudebates.tv • #eudebates the unique initiative aiming to promote debate, dialogue, knowledge, participation and communication among citizens. #Croatia #inflation #EURO #Banks #Economy #Currency #BankingUnion #Eurozone #Eurogroup #GDP #austerity #forecast #Europe #protectionism #Trump #USA #tradewar #tradewars #trade #growth #Gentiloni #wages
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