ZAGREB, Aug 13 (Hina) - Analysts with Raiffeisenbank Austria's Zagreb (RBA) branch estimate that economic growth in the coming period will rest solely on higher investments, and that the growth of Gross Domestic Product (GDP) in 2003
will stay 3.8 percent.
ZAGREB, Aug 13 (Hina) - Analysts with Raiffeisenbank Austria's
Zagreb (RBA) branch estimate that economic growth in the coming
period will rest solely on higher investments, and that the growth
of Gross Domestic Product (GDP) in 2003 will stay 3.8 percent. #L#
Economic growth will depend on road-building, which in turn depends
on government guarantees, RBA says in its latest bulletin, released
on Tuesday. Road-building will gain momentum next year and as a
result, GDP will grow at a rate of 3.8 percent.
Data on GDP growth in the last five quarters indicate that the
growth is based on three components - personal spending,
investments, and tourism.
All indicators show that personal spending will gradually slow
down, primarily due to the sources which finance it. Investments
will continue to strongly grow in 2003.
As for other indicators, industrial production does not have
sufficient direct investments, which precludes any intensive
growth. This is linked to the permanent growth of the unemployment
rate.
Compared to last year, credit activity in the following months will
slow down considerably. A drop in interest rates and the high
solvency of banks were taken advantage of to increase credit
activity in 2001, which continued early this year.
Interest rates on short-term state debts are at an all-time
minimum. It is evident that further placements at such low rates
will soon no longer be cost-efficient for financial institutions
and firms.
The current account deficit in this year's first quarter was close
to two billion kuna (EUR270.3 million). This year's state budget
foresees a current surplus of 667 million kuna (EUR90.1 million),
which means that 2.5 billion kuna (EUR337.8 million) will have to be
made in sufficit by the end of the year to meet the annual
projection.
Foreign analysts cite problems with the state budget and stalling
in the signing of a deal with the International Monetary Fund as one
of the negative factors for Croatia. Another problem are the
frequent misunderstandings within the ruling coalition and the
possibility of early elections.
(hina) ha