The European Bank for Reconstruction and Development (EBRD) has significantly lowered Croatia's economic growth projections for 2011 and 2012 as part of its downgraded forecasts for the entire region of transition countries it operates in.
Croatia's growth projection for 2011 has been downgraded from 1.1 percent in July to 0.5 percent.
The forecast for 2012 has been reduced to 1.9 percent form the previously forecast 2.8 percent.
Croatia's economy has stabilised but short-term growth prospects remain very weak, while significant vulnerabilities are associated with the high level of external debt and high degree of euroisation. However, the successful completion of accession negotiations this year, and the realistic prospect of full EU membership in mid-2013 are positive signs for the medium term, the EBRD said in a statement.
The latest EBRD forecast for the entire region, covering 29 countries, envisages a 4.5 percent growth rate in 2011 as against the previously forecast rate of 4.8 percent. The forecast for 2012 has been downgraded even more, from 4.4 percent in July to 3.2 percent.
The EBRD says that the latest forecasts for the region were based on an ultimately contained but protracted eurozone debt crisis.
