The European Commission has, in its published forecasts, slightly increased their estimates of growth for the euro area and the EU with 1.5% and 1.8% from may of this year on 1.6% and 1.9%.
Such improvements in the estimates of the consequences are of actual developments in the economy of the EU, assists low prices of oil, ekspanzivnom monetary policy of the ECB and the decline in the value of the euro, but the impact of these factors, however limited, and growth and further relatively slow. In addition to these positive factors, at the global market grows and the impact of the negative, and so the European Commission said the slowdown of growth of the developing countries and the global geopolitical tensions as the main external factors slowing the growth. For the next two years, it is expected to increase slightly the dynamics of growth, for the EU to 2.0 in 2016. and the 2.1% in 2017. year, predicts a positive impact of the movement on the labour market, the growth of disposable income, the greater the credit activity of commercial banks, and investment growth, and positive contribution would be needed to give and the structural reforms that are being carried out in some Member States.
For Croatia's growth estimates for this year increased from 0.3% to 1.1%. According to the interpretation of the European Commission, the significant influence of external demand to GDP growth has joined the and domestic demand, mostly triggered by low energy prices and amendments to the income tax that led to the growth of the net salary. The growth has helped and good tourist season, and according to the EC, the election and the probable implementation of the conversion of loans in Swiss francs in euro loans, will not have a positive impact on the trends of GDP by the end of the year. For the coming year forecast was increased from 1.2% to 1.4%, i.e., it is expected the sequel to treasure the positive trends. The slowdown in developing countries should not have major consequences on Croatia's economy whose exports are oriented towards the EU and the countries in the region, so despite slowing export growth limited higher ovogodišnjom base, the EC expects that its growth will be around 5%. In domestic demand is expected to continue until a slight growth of personal consumption, mostly because of limited credit activity, and is not expected to even more significant growth of private investments. Just make the code public investment triggered by the use of EU funds could reach a more explicit growth. In 2017. themselves according to EC forecasts growth should accelerate further on still low 1.7%.
These are the forecasts of the European Commission expected and are only a reflection of the current situation on the global market and in the Croatian economy. However, the fact is that Croatia such growth is insufficient for faster reaching the average level of development of the EU, and even to return to the pre-crisis level in 2008. of the year. In addition, Croatia is, and according to the new estimates, among the EU Member States with the lowest GDP growth this year. More specifically, GDP should fall only in Greece, and less growth rates should have the only Italy, Austria and Finland.
The European Commission has issued and your expectations of the movement of the budget deficit and public debt. According to the size of the General Government budget deficit, Croatia from 2015. years of further position itself as the worst country in the European Union. In all three of the estimated year worse we are from Spain and Greece that are directly behind us, and particularly worrying predictably slow to reduce the deficit. Namely, in 2016. year, compared to 2015, the share of the deficit-to-GDP ratio at the level of the EU average should be reduced by 0.5 percentage points, and in Croatia only for 0.2 percentage points (from-4.9% to-4.7% of GDP). In other words, the unfavourable ratio for Croatia, whose budget deficit is less favourable than the European average for 2.4 percentage points this year, for 2.7 percentage points in the coming year and to 2.5 percentage points in 2017. year.
Such insufficient fiscal consolidation and further pushes the amount of general government debt in the long run unsustainable levels so he rises with predicted 89.2% of GDP in 2015. year at 91.7% in 2016. year and at 92.9% in 2017. year. According to the growth of the share of the public debt-to-GDP ratio, in the coming year of Croatia are in a worse position, only Latvia and Greece, whereat the share of public debt-to-GDP ratio in Latvia currently on low 38.3%. At the same time, in the EU as a whole and the euro zone anticipates the process of reducing the share of general government debt-to-GDP ratio. Projections by the European Commission confirms the already known difficult fiscal position of Croatia, but at the same time do not anticipate shifts that would make Croatia in coming years allow improvement nezavidnog position among the EU Member States.