Dun&Bradstreet expects the Croatian economy to return to growth later this year with real GDP likely to "expand by a meagre 0.5% for 2010 as a whole."
The July edition of the International Risk & Payment Review, covering 132 countries, says that estimates about Croatia's real GDP, which fell 4.5 percent in Q4 2009 to see a fall of 2.5 percent in Q1 2010 year on year "is in line with D&B's expectations that the economy would not return to growth until later in the year, owing in part to the austerity measures introduced by the government in 2009 and continued into 2010."
The report, released by the Zagreb-based Bonline agency, reads that the Economic Recovery Programme, "which was announced in April and has yet to be either fully operational or reflected in the economic statistics, should help to bolster growth modestly in the latter part of the year."
According to the report, "measures to abolish the emergency 'solidarity' tax in two stages (July and November will provide some relief for households, while businesses have already been benefiting from a significant reduction in the payment arrears of public sector entities since May."
Public sector payments are now taking an average of approximately 60 days with the government intending "to eliminate payments beyond agreed terms by the end of 2010."
D&B also welcomes the tender process for the privatisation of shipyards.
"Sale of the shipyards would provide a basis for agreeing with the (European) Commission a timetable for reducing subsidies."