HUP: Slows GDP growth, in 2025 will be lowered to 2.5 percent

The Central Bureau of Statistics (CBS) announced Wednesday the first estimate that GDP in the first quarter of 2025 reached 2.9 percent in terms of the same period a year before. This is already the 17th quarter in a row how the economy is growing, but slower than in the previous quarter, when the growth was 3.9 percent. GDP, according to HUP, in the first quarter of this year slowed down 2.9 percent per year (after 3.9 percent in 2024) due to a significantly slower growth of personal consumption, while without the contribution of the state consumption (+5.8 percent), GDP growth would be closer to 1.5 percent. Purchasing power grew on a strong real salary, employment and consumer loans, but the growth of consumption (1.7 percent) was still more than three times lower than last year, and above all under the influence of the boycott of shops and later Easter, HUP said.

Investments, they say, were halved (at +4.5 percent) of growth dynamics compared to last year, which reflects the slowdown of construction from high base and uncertainty in the external business environment (not only in terms of trade tensions, but also the expectations of entrepreneurs about deregulation of business in Europe).

Industrial production records recovery especially in the energy sector and part of the capital goods. Foreign demand has pushed the growth of commodity exports to as much as 11.6 percent per year. Namely, on the eve of the introduction of American customs, many European exporters sought to proceed to the exported goods on the lower customs duties, according to HUP.

In the second quarter GDP growth about 2.5 percent

HUP in the second quarter expects a solid realistic GDP growth of about 2.5 percent, given that personal consumption still remains a reliance on the growth, encouraged to pay for a strong growth in the public sector, a better tourist preseason, accelerating the growth of loans to companies and strengthening construction activities.

They note that GDP growth estimates in 2025 were slightly reduced to 2.5 percent from 2.7 percent based on a certain exacerbation of growth in the Euro area by about 0.5 percentage points, while the fiscal expansion, the Robly Labor market and construction are still strongly supporting aggregate demand.

Croatia, in 2026, will increasingly share the economic fate of the Euro area in 2026 in which analysts are continuously « cut » by GDP growth forecasts to only one percent or lower.

HUP growth assessment in 2026 has lowered HUP to 2.5 percent from 3 percent due to the adverse effect of fundamental global trade policies, a decrease in fiscal impulses and cooling the labor market.

« Croatia must target investments in the activities that create higher added value, and the tool for this is a law on the incentive of investments that must be competitive and encourage investment in research and development, which is necessary to adapt to being competitive with the environment countries, » HUP said.