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Croatia economy contracts in 2013

28 February 2014, 12:26 CET
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(ZAGREB) - Croatia's economy contracted by 1.0 percent last year, marking the fifth year of recession in a row in the European Union's newest member, official figures showed on Friday.

First estimates also showed that the country's gross domestic product (GDP) shrank by 1.2 percent in the last quarter of 2013 compared with the same quarter a year before namely due to fall of exports, a national statistics bureau statement said.

It was the ninth quarter in a row that Croatia's GDP was contracting.

The economy of Croatia, which joined the EU in July, has not grown since 2009, hobbled by a rigid labour market and weak business environment.

The country's macroeconomic figures are seen as rather worrying -- industrial output and exports of goods fell by 2.0 and 6.0 percent respectively last year, while unemployment reaches some 22 percent.

Local economic experts warn that a high pessimism of both producers and consumers has a negative impact on spending, production and investments.

In January, the EU launched disciplinary proceedings against the former Yugoslav republic over its excessive budget deficit, giving it until 2016 to obey the 28-nation bloc's rules.

The centre-left government downgraded its growth forecast for this year to a meagre 0.2 from 1.3 percent. However, analysts forecast a 0.4-percent contraction.


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