IMF's outlook for Croatia's economy is that it will fall by 0.2 percent, downgrading its previous outlook on Croatia issued in the autumn which then projected a growth of 1%.

According to the latest report, the fall was deeper in activities in 2012, after the fund corrected last October's estimation of 1.1% to 2%.

Recovery can be expected only in 2014 with a projected growth of around 1.5%.

The annual inflation rate should be around 3.2% which again is a little higher than the autumn forecast of 3% and inflation should slow down significantly in 2014 coming down to around 2.3%.

Current account is expected to be balanced this year, IMF has said whereas earlier estimates indicated that the deficit in 2013 would be around 1.3% of GDP. Next year the current account could record a mild deficit again of around 0.5% of GDP.

The IMF report foresees a significantly higher unemployment rate for the year of around 15.2% compared to 13.3% forecasted in the October outlook. Unemployment could slip back to 14.7% in 2014.

The IMF releases a regular report on the outlook of economic growth twice each year, in the spring and autumn. After the financial crisis in 2008, the outlook has usually been updated in January and July.

This global money lender has downgraded its outlook for the new European sub-region which includes Croatia in addition to Turkey, Poland, Romania, Hungary, Bulgaria, Serbia, Lithuania and Latvia.