Economy maintained weak performance in 1Q – some support to come from stabilizing domestic demand, solid tourist season and steady external demand – 2011 GDP forecast maintained at 1%
Labor market, given slow recovery, would not bring any reversal in 2011
Current account deficit, after record low level in 2010, is expected to widen slightly in 2011, though maintaining sustainable tone
Foreign debt growth moderated, higher refinancing risks keep external position sensitive to global investors sentiment
Monetary policy eased to support the credit activity – only marginal credit acceleration expected in 2011
Inflation risks increased on supply-side pressures, while domestic demand remains largely subdued – inflation seen accelerating to close to 3% region in 2011
Exchange rate maintained stable pattern, which is expected to prevail for the remainder of the year, with HRK on average being ca. 1.5% weaker
Public debt financing operations supported by high liquidity, MoF expected to meet majority of the financing needs for 2011 before summer
Fiscal consolidation postponed for 2012 – fiscal risks remain pronounced as public debt should surpass 60% of GDP in 2011
Equity market showed some dynamic at the beginning of the year, with INA main driver of the market, both as index mover and liquidity generator, recently, however, the market entered into a stagnation phase
EU indentified indicative working date of accession – July 1, 2013
