In 2009, Croatia will record a drop in Gross Domestic Product (GDP) of 5-6 percent, and in 2010 its GDP will go up by around 1.5 percent, the European Bank for Reconstruction and Development (EBRD) said in its Transition Report for 2009 in Zagreb on Tuesday.
As for the bank's forecasts for Central and East Europe, the EBRD believesthat this year the region will see a 6.3 percent drop in economic activity,while in 2010 the economy in the region is expected to go up by 2.5 percent onaverage.
The EBRD, which is the biggest investor in Central and East Europe, believesthat the crisis in the region is still not over and that the region has beenhit harder by it than other, more developed regions, where economic activity isexpected to drop 3.4 percent this year, or Latin America, where economic growthis expected to decline 2.5 percent, or developing Asian countries, which areexpected to see a growth of 1.5 percent.
It is still possible that some regional indicators, such as unemployment orthe number of uncollected loans, will deteriorate rather than improve, said theEBRD's chief economist, Peter Sanfey.
The year 2009 has been a year of some disappointments and delays, forexample, there has been no significant progress in the process ofprivatisation, notably of shipyards, and in the first half of the year therewas a stalemate in the process of accession to the European Union, Sanfey said.
Still, he pointed to the financial sector, which he said had withstood thecrisis well, thanks to, among other things, the wise policy of the centralbank.
Sanfey added that 2010 would be another difficult year, but that the bank'sgrowth forecast for Croatia was better than the government's growth forecast ofmerely 0.5 percent.
Central and East Europe has withstood the crisis better than many hadexpected, and the strong commitment to reforms, progress, and in Croatia'scase, accession to the EU, have encouraged us in drawing up this report, Sanfeysaid.
The EBRD director for Croatia, Charlotte Ruhe, said that in 2009 the bankhad invested EUR 255 million in Croatia, twice as much as the year before, withemphasis on the private sector, which she said accounted for almost 70 percentof all investments.
Ruhe said that priorities in the next three years would be investments incorporate competitiveness, projects facilitating energy efficiency, tourism,infrastructure, notably railways, environmental protection projects, and thefinancial sector.
Ruhe said the EBRD would hold its annual conference in 2010 in Zagreb on May14-15. The conference is expected to draw more than 2,000 participants.
