Key View

• We at Fitch Solutions expect the Croatian Democratic Union-led government remain stable in the coming quarters, ensuring broad policy continuity. We believe the government will take a cautious approach to lifting the latest round of Covid-19 restrictions, but reopen the economy for the tourist season in Q221.
• Renewed structural

Key View

• We forecast Croatia's construction industry to return to positive real growth territory during 2021, 3.5% y-o-y, following the sharp economic upheaval brought about by the Covid-19 pandemic that induced a contraction during 2020.
• The development of land transport infrastructure projects, often spearheaded by the European Union (EU)

Key View

• Croatia’s pharmaceutical expenditure will account for a growing share of total healthcare spending.
• Policies aimed at reducing pharmaceutical expenditure have had mixed results.
• High levels of public hospital debt will continue to exert significant constraints on government spending.

Croatia’s pharmaceutical expenditure will

Key View

• With a significant debt outstanding to drug wholesalers, we expect authorities within Croatia’s public health system will soon need to negotiate repayment to ensure continued medicine supply.
• We expect the economic impact of Covid-19 will drive even greater cost containment in the healthcare budget over the coming years and

Key View

• Robust growth in Q1 was driven in part by impressive fixed investment growth.
• Fixed investment will continue to drive growth in the quarters ahead but will likely moderate after 2020.
• Household consumption will remain a moderate but stable support to growth in the years ahead. Net exports will likely act as a drag over the same

Key View

• At Fitch Solutions, we believe Croatia will likely fulfil the convergence criteria for eurozone accession within the coming decade.
• Adoption of the euro will likely represent limited costs for Croatia in terms of monetary policy sovereignty, as its own currency is in a tightly-managed crawling peg.
• Banking regulation and relatively