However, the foreign trade deficit and the external debt continue to limit faster growth and development, which will result in an increase of the payments' balance deficit, said Jasna Belosevic-Matic, the HGK director for macroeconomic analyses.
Presenting national economy trends in 2006, she said it was imperative to focus on increasing exports, with the assumption of higher productivity and employment.
In this year's first 10 months, industrial production went up 4.3 per cent from the same time in 2005. The annual growth of consumer prices at the end of October was 2.1 per cent after more than a year in which the annual inflation rate was above three per cent.
In tourism, the physical turnover grew at a twice slower pace than in 2005, despite bigger accommodation capacities. However, despite such trends, the physical volume reached a record high of over 51 million nights for the first time in the past 20 years.
It is estimated that foreign exchange revenue in tourism will revolve around EUR6.2 billion.
Foreign trade figures in the first 10 months of 2006 show that exports grew twice as fast as in 2005 (17.3%), while imports grew 14.7 per cent. This pace slowed down the growth of the trade deficit, which went up at the rate of 12.1 per cent, as against 19.2 per cent last year, reaching USD9.4 billion. However, imports remain twice as high as exports.
Due to its high amount and constant tendency to grow, the gross foreign debt has remained a problem of the Croatian economy for the past couple of years, said Belosevic-Matic.
In this year's first nine months, the gross foreign debt went up EUR1.5 billion. The government's debt was reduced by nearly EUR400 million, the banks' debt by about EUR73 million, while the debt of the other sectors went up EUR1.6 billion and direct investments went up EUR407 million.
The gross foreign debt accounted for 81 per cent of the GDP estimated for 2006, which indicates that its share by the end of the year will be higher than in 2005.