In 2024 Croatia's economy will grow by 2.7%, the World Bank says, revising upward its October forecast by 0.2 percentage points. This means that the rate of growth will more or less remain at the level of 2023, when, according to the latest World Bank estimate, economic activity grew by 2.5%.
In 2025 growth is expected to pick up mildly to 3.0%, the World Bank forecasts, revising down its October forecast by 0.3 pp.
In the group of EU countries that are part of the region of Europe and Central Asia, Romania's economy is expected to grow the most in 2024, by 3.3%.
Closest to Croatia in terms of the forecast growth rate this year in Poland, where economic activity is expected to grow by 2.6%. Bulgaria is close by, with a 2.4% growth forecast.
The euro area economy is expected to grow by a mere 0.7% in 2024, which is roughly half the rate forecast by the World Bank last summer. In 2025 growth should pick up to 1.6%, which is 0.7 pp less than forecast last June.
In 2023 economic activity in the euro area grew only 0.4% as high energy prices weighed on household spending and
firms’ activity, particularly in manufacturing, the World Bank said.
The downturn in late 2023 reflected broadening weakness in the economy, which extended to the services sector.
This was partially attributed to the ongoing decline in exports amid deteriorating export price competitiveness and tepid external
demand, the World Bank says.
"Growth in 2024 is forecast to firm to a still anemic 0.7 percent. Easing price pressures should boost real wages and lift disposable incomes, but the lagged effects of past monetary tightening are expected to keep a lid on domestic demand, especially business investment."
"Growth is projected to pick up to 1.6 percent in 2025, supported by a recovery in investment growth, especially as the European Union's
NextGenerationEU (NGEU) funds lift public investment and help offset modest consolidation of national fiscal balances."
Global economy is estimated to slow down mildly also in 2024, with growth forecast set at 2.4% as against last year's 2.6%.
The growth forecast for 2024 is close to three-quarters of a percentage point lower than in the first decade of the 21st century, the World Bank notes.
Developing economies will grow by a mere 3.9% this year, more than one percentage point less than the average in the past decade.
By the end of 2024 people in approximately one-quarter of developing countries and around 40% of low-income countries will still be poorer than they were before the COVID-19 pandemic, the World Bank warns, estimating that developed economies will grow by 1.2%, after a 1.5% growth in 2023.