ZAGREB, Dec 8 (Hina) - On the macroeconomic and financial fronts, the business year 2003 will not bring significant, either negative or positive, steps forward as against this year, according to analysts who took part earlier this
week in an Infoforum conference which addressed macroeconomic and financial forecasts for next year.
ZAGREB, Dec 8 (Hina) - On the macroeconomic and financial fronts,
the business year 2003 will not bring significant, either negative
or positive, steps forward as against this year, according to
analysts who took part earlier this week in an Infoforum conference
which addressed macroeconomic and financial forecasts for next
year. #L#
Analysts from Croatian business banks, the Economy Institute
Zagreb (EIZ), the Croatian National Bank (HNB) and the government
expect the economic growth rate will be slightly higher than this
year, revolving around four percent.
The chief growth generator, as has been the case this year, will be
domestic consumption, particularly personal consumption, and
investments. The growth of consumption and investments, although
significant, will decline slightly. Sandra Svaljek of the EIZ
expects investment growth in 2003 will decline to 3.8 percent,
while Zarko Miljenovic, the chief economist of Zagrebacka Bank,
Croatia's largest bank, is more optimistic, excepting a growth of
7-8 percent.
The decline of the personal consumption growth rate is related to
the drop in domestic banks' credit activities, analysts say but add
this is relative because this year's 20 percent increase in loans is
exceptional. The decline in credit activity, besides the very high
base, will also be affected by the bank's obligation to increase
their reserves, in keeping with the growth, says Evan Kraft,
director of the HNB research sector.
Analysts also estimate the free trade agreements Croatia has signed
and the expected improvement of economic conditions in Croatia's
principal foreign markets, especially in the European Union,
should reflect positively on the overall increase in the export of
commodities and services.
All forecasts regarding 2003 are based on expectations that Croatia
will soon sign a new stand-by agreement with the International
Monetary Fund. This could be undermined only by several mainly
political factors. Capital markets and potential investors could
be put off by the recently increasing disagreement as to the
continuation of privatisation and fiscal policy changes which are
related to the fact that 2003 will be a pre-election or election
year, says Miljenovic.
The possible although not expected deterioration of relations with
the EU might also pose a potential risk, as well as problems Croatia
has no influence on, such as the delay in the global economic
revival and increase in oil prices due to possible attacks against
Iraq, most analysts agree.
(hina) ha