ZAGREB, July 7 (Xinhua) -- Croatia is among the three most affected countries in the European Union(EU) by the coronavirus crisis and its gross domestic product(GDP) will drop by 10.8 percent in 2020, according to a European Commission report released on Tuesday.
The Summer 2020 Economic Forecast presented a dimmer projection on Croatia's GDP contraction in 2020 than the one in May, when the Commission predicted a 9.1 percent drop. For the year 2021, the Commission sticks to its previous forecast -- recovery of 7.5 percent.
Croatian Finance Minister Zdravko Maric said Tuesday that the forecast showed that there will be no V-shaped recovery.
"It is clear that a full recovery is expected in 2022," the minister said.
The Summer 2020 Economic Forecast said that the Croatian economy was in a more resilient position when the COVID-19 pandemic reached the country than it had been at the onset of the 2008 global financial crisis.
Large-scale layoffs have been avoided thanks to the government's wage support measures. "Ongoing and new projects financed by EU funds and several liquidity support measures for companies should facilitate recovery in investment," said the report.
The report showed that countries that largely depend on tourism would be the most affected by the COVID-19 crisis.
The tourism industry accounts for almost 20 percent of Croatia's GDP. According to the report, Croatia's tourism sector is expected to remain depressed throughout 2020 and should only gradually recover in 2021. Enditem