Republic of Croatia

The economic expansion continues, driven primarily by private consumption and exports of goods and services. Fiscal performance has been strong, but the materialization of contingent liabilities from government guarantees is likely to reduce the overall surplus. Low public and private investment, and continued emigration weigh on medium-term growth prospects. Downside risks in the near-term stem from possible changes in regional or global economic and financial conditions, and the further realization of contingent liabilities.