Investor Presentaiton
Macroeconomic developments
Fiscal position expected to remain balanced, with public debt further declining
Unemployment and inflation
Public debt and general government deficit
17,3%
16,3%
13,1%
11,3%
9,6%
8,7%
1,1%
1,7%
1,8%
84,0% 83,8%
80,6%
78,0%
74,4%
71,4%
0,8%
0,0%
-0,2%
-0,5%
-1,1%
-5,1%
-3,3%
-0,9%
-0,5%
2014
2015
2016
2017
2018e
2019e
2014
2015
2016
2017
2018e
2019e
Unemployment rate (%)
■Inflation (%)
as
Labor market continues to reflect positive economic trends
unemployment rate is anticipated to move into the single-digit region,
while wage growth approached mid-single digit region
Though inflation moved in a tight band at the beginning of the 2018,
recent months bought more pronounced acceleration as CPI moved
above 2% mark, given stronger oil price dynamics we see inflation
remaining at close levels also in remainder of the year, with average FY18
seen at 1.7% mark, followed by similar CPI footprint also during 2019
Public debt (% of GDP)
■General government deficit (% of GDP)
Following 2017 budget surplus of 0.8% of GDP and additional drop in the
public debt trajectory, fiscal developments should remain on encouraging
track, with 2018 expect to bring balanced budget and continued reduction
of public debt towards 75% of GDP. Short-term downside risks are
dominantly related to uncertainty over shipyard-related guarantees
(negative one-off up to 1.5% of GDP)
Improved outlook continued to positively reflect on the rating profile as
both Fitch and S&P upgraded the outlook to 'positive' in 2H18, hence
increasing the likelihood that Croatia could receive an upgrade to IGR in
2019
ERSTEŚ
Source: Croatian Bureau of Statistics, Erste Group Research
Bank
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