GDP growth welcome, but lower than debt interest, says HUP

Croatian Employers Association (HUP) director Davor Majetic said on Friday that the GDP growth in the third quarter was a welcome change in economic trends but that it was insufficient to significantly lower interest on due debts.

The national statistical office (DZS) earlier in the day published a preliminary estimate showing that GDP in Q3 grew 2.8% on the year.

"The significant GDP growth in Q3 is a welcome change in economic trends compared to previous years which should be put in the real context. It has been predominantly caused by favourable conditions abroad and by a successful tourist season," said Majetic.

Q3 was the fourth consecutive quarter to see the growth of GDP and the growth was faster than in the previous quarter, when the economy grew 1.2% on the year. The 2.8% growth rate is also the highest rate since the second quarter of the last pre-recession year 2008, when GDP was up 2.9% on the year.

Majetic warned, however, that the growth was "fragile and its sustainability uncertain due to a lack of private investments and new employment in the private sector."

"The growth is insufficient because it is significantly lower than the amount of interest on due debts, which continues to increase the foreign debt in the conditions of historically low interest rates. The growth was achieved in conditions of a very low base, amidst very weak structural reforms and it cannot significantly change the overall economic situation," said Majetic.

Last update: Fri, 27/11/2015 - 14:00

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