ZAGREB, July 16 (Xinhua) -- Raiffeisen Bank (RBA) analytics raised their forecast for Croatia's economic growth in 2019 from 2.5 percent to 2.8 percent, Croatia news agency Hina reported on Tuesday.
The bank raised Croatia's GDP growth for 2020 as well, from 2 percent to 2.5 percent.
The GDP growth, RBA analysts claim, is generated by the continuation of strong household consumption and investments. These are also the reason for the unexpected 3.9 percent growth in the first quarter. First indicators for the second quarter show a continuation of growth, but the real growth should be more moderate.
Retail sales in May were 4.6 percent down from the previous month and 2 percent down from May 2018. It was the first time they dropped after going up for 56 months. The bank analytics claim that the drop in consumption is connected with lower tourism results in May that happened because of bad weather.
Such trends show that the reliance on tourism is too high for the economy and public finances as well since revenues are largely relying on VAT, Director of RBA's economy and financial researches Zrinka Zivkovic Matijevic explained.
Analytics also predicted lower unemployment rate that could drop to a historic low, while noting that labor shortage will remain as a burden to the economy.
