July 9, 2020 / 4:09 PM / a month ago

Croatia's central bank sees economy contracting 9.7% this year

ZAGREB (Reuters) - Croatia’s central bank said on Thursday it expected the country’s gross domestic product (GDP) this year to contract 9.7% due to the coronavirus pandemic.

Next year it expects a recovery of 6.2%.

“The projections have been made in the circumstances of increased uncertainty related to the coronavirus pandemic, so we’re also considering a somewhat worse scenario with an even stronger contraction,” the central bank said in a statement.

Croatia has so far had 3,416 cases of COVID-19 with 115 deaths, but in the last few weeks the spread of the disease has accelerated. On Thursday the number of newly infected was 91.

The central bank also said it expected prices this year to fall 0.1%, while in 2021 the inflation is seen as 0.7%.

It added that Croatia’s current account this year is expected to remain in surplus despite lower exports and an expected strong fall in tourism receipts, as the imports will also fall, while an inflow of the European Union development funds is seen rising.

Reporting by Igor Ilic; Editing by

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