ZAGREB, Sept. 24 (Xinhua) -- The Croatian government released on Thursday its prediction of eight percent gross domestic product (GDP) drop in 2020 and five percent growth in 2021, as well as growth of 3.4 percent and 3.1 percent for 2022 and 2023, respectively.
"This is good. It's a smaller drop in GDP than the estimate at the beginning of the COVID-19 crisis," Prime Minister Andrej Plenkovic said after the government adopted guidelines for the preparation of the state budget.
According to earlier projections published in April, Croatia's GDP was expected to shrink 9.4 percent in 2020.
Plenkovic was confidence that Croatia would quickly reach the level of responsible public financial management, reduce public debt and maintain an investment credit rating.
At Thursday's government session, Finance Minister Zdravko Maric said that public debt is expected to be around 86 percent of the country's GDP this year. In the next three years, its share is expected to decrease at an average rate of two percentage points per year. The general government deficit is projected to be 6.7 percent of GDP in 2020 and 2.9 percent in 2021. The inflation rate is expected to be 0.8 percent next year.
Last week, Standard & Poor's affirmed its 'BBB-/A-3' long and short-term credit rating on Croatia. The credit agency predicts that Croatia's economy will contract by eight percent in 2020, and that its real GDP will recover to pre-pandemic levels by 2022.
Despite the coronavirus crisis, Croatia plans to replace its currency kuna with the euro in 2023. In July, Croatia was admitted into the European Exchange Rate Mechanism (ERM II), a preliminary stage for entry into the eurozone. Enditem
