ZAGREB, 23 April (Hina) - The Croatian economy is projected to grow by 3.1% in 2025, nearly four times faster than the euro area average, but with a current account deficit, according to the latest regular spring report published by the International Monetary Fund (IMF).

The IMF's previous World Economic Outlook, published last autumn, forecast that Croatia's economy would expand at the rate of 2.9% in 2025.

The latest  World Economic Outlook reads that in 2025, Croatia's economy is projected to rise at a rate of 3.1%, slowing down to 2.7% in 2026.

The Washington-based Fund has significantly raised its inflation forecast for Croatia this year, from 2.8% to 3.7%. However, price growth is expected to decelerate to 2.6% in 2026.

The current account balance is now projected to show a deficit of 0.7% of GDP in 2025, according to the IMF’s latest estimates. Last autumn, they had forecast a surplus of 0.9% of GDP for this year.

For 2024, the IMF now estimates the current account recorded a deficit of 1.2%, whereas their autumn forecast had projected a surplus of 1.5%.

Looking ahead to 2026, the IMF projects a current account deficit of 0.6% of GDP.

The Fund has slightly lowered its unemployment forecast for Croatia this year by 0.2 percentage points to 5.3%, a level it also expects to remain in place next year.

Meanwhile, the euro area economy is expected to grow by just 0.8% this year, a downward revision of 0.2 percentage points from the IMF’s January forecast.

In 2026, economic activity in the euro area is projected to grow by 1.2%, which is also 0.2 percentage points lower than previously estimated.