- by croatiaweek
- November 17, 2025
-
in
Business
Zagreb
The European Commission’s latest autumn forecast, published on Monday, places Croatia once again among the fastest-growing economies in the European Union.
Strong household consumption driven by rising real incomes continues to fuel growth, while employment remains on an upward path.
Yet, despite the broadly positive outlook, labour shortages, persistent inflation and a widening deficit are becoming increasingly pressing concerns, Jutarnji list writes.
According to the forecast, Croatia’s GDP is expected to grow by 3.2% in 2025 before easing to 2.9% in 2026.
This remains well above the EU average of 1.4% and the eurozone’s 1.3% this year. Only Ireland, Malta and Cyprus are set to record stronger growth rates.
The labour market continues to tighten. Employment is projected to rise by a further 2.1% this year, while unemployment is forecast to fall to 4.7% in 2025 and 4.5% the year after, one of the lowest rates in the bloc.
The EU average stands at 5.9%, with Spain at the opposite end of the scale at 10.4% and the Czech Republic boasting the lowest rate of just 2%.
However, the Commission warns that Croatia will increasingly struggle with labour shortages, even with continued recruitment from outside the EU.
Public debt is moving in a favourable direction. It is expected to fall to 56.2% of GDP this year and 52.1% in 2026, contrasting sharply with Italy’s rising debt burden and Greece’s still-high but declining levels.
Inflation remains Croatia’s most persistent challenge. Prices are forecast to rise by 4.3% this year before easing to 2.8% in 2026, still notably above the EU and eurozone averages.
Only Romania, Estonia and Hungary are experiencing higher inflation. The real estate market continues to add pressure, with property prices still increasing at double-digit rates.
The Commission also cautions that stronger-than-expected wage growth could further elevate price pressures and erode Croatia’s export competitiveness.
Overall, Brussels describes EU-wide growth as “solid”, though it highlights global uncertainty and rising protectionism as key risks.
For Croatia, the latest projections mirror the spring outlook, though inflation is now expected to be higher than previously anticipated.
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