This report reviews key macroeconomic data and microeconomic developments for Croatia published between September 4 and October 6, 2015.
In the beginning of October, the IMF raised its 2015 growth forecast for Croatia’s economy to 0.8% from 0.5% projected in April.
Croatia’s economy expanded by 1.2% y/y in the second quarter of the year, supported both by domestic and foreign demand, the statistics office said confirming its flash estimate released in August. Later in September, the Zagreb Institute of Economics (EIZ) revised up by 0.1pp to 0.5% its growth estimate for the Croatian economy this year.
In September, the Croatian government revised the 2015 budget law, keeping the planned deficit at 3.8% of GDP. The 2015 GDP growth was revised up to 1.1% from 0.5%.
The parliament approved the conversion of loans denominated in Swiss francs with part of the principal being written off and all the costs being borne by the bank. A number of foreign banks had already renewed threats to take the Croatian state to Court over the measure.
The report also provides details on the organisation of the second licensing round for offshore hydrocarbon exploration and the signing of production sharing agreements for onshore and offshore oil and gas exploration.
It also contains information on the way Croatia handled the migrant crisis and announces the date when general elections will be organised.


Key Points:


• Croatia's consumer prices fell 0.6% y/y in August, after dropping 0.4% the previous month. The working-day adjusted industrial output rose 2.8%, slowing from 2.9% in July. The annual growth of the first eight months of the year reached 1.9% y/y.
• The unemployment stayed flat on the month a 15.9% in August after five consecutive months of decrease. The average net monthly wage rose 3.8% in July, slowing from a 4.5% hike in June.
• January-July trade gap narrowed 2.5% y/y as exports rose at a faster pace than imports.