Croatian economy likely to shrink by 9.4 pct in 2020: PM

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ZAGREB, April 30 (Xinhua) -- Croatia's gross domestic product (GDP) is expected to decline by 9.4 percent in 2020 due to the COVID-19 pandemic, but is likely to rally by 6.1 percent in 2021, Prime Minister Andrej Plenkovic said Thursday.

Speaking at a regular cabinet session, Plenkovic said his government is adopting the National Reform Program for 2020 based on a prediction that the impact of the crisis -- both on local and global economy -- would be short-termed. He noted that the program relies on sustainable economic growth and development, connecting education with the market and sustainable public finances.

Croatian Finance Minister Zdravko Maric said that the impact of the COVID-19 crisis will be more severe than the global financial crisis in 2008. However, he noted that the country is this time more prepared.

The public debt-to-GDP ratio in 2020, based on the Ministry of Finance projection, will increase by 13.5 percentage points to 86.7 percent of GDP. In 2021, the ratio is expected to fall to 83.2 percent of GDP.

Thanks to the government measures adopted to save jobs, the prime minister said that the number of people employed is expected to drop just 3.3 percent in 2020. The unemployment rate could be 9.5 percent in 2020, and 9 percent in 2021, he said.

For the past three years, the Croatian government had run a budget surplus. But this year, the general deficit is projected at 6.8 percent of GDP, or 24.8 billion kuna (3.58 billion U.S. dollars), and it is expected to drop to 2.4 percent in 2021, according to Plenkovic. Enditem

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