Highlights from the January, 2010 (No. 41) issue:

Recent developments: 
- Economy turned down again in the third quarter 2009.
- Negative trend in personal consumption moderates.
- Downward adjustment in government consumption.
- Investments continue to decline albeit at a slower pace.
- Stabilization of foreign trade flows.
- Weak real sector activity.
- Rapid increase in unemployment.
- The average gross wage stable; ’crisis tax’ reduces take-home wages.
- Monetary aggregates start to rebound; credit channels still clogged.
- Easing up of money market pressures.
- Tame inflation.
- Public debt growth accelerates.
- Weak revenue collection and standard expenditure dynamics determine the 2010 fiscal outturn.
- Fiscal policy in 2010 – fiscal adjustment in sight. 

Projections: 
- GDP estimated to have declined 5.9 percent in 2009; negative GDP rate projected for 2010.
- Personal consumption expected to stabilize in 2010.
- Current account deficit close to 6 percent in 2010.
- Further deterioration on the labor market, with the unemployment rate increasing from the estimated 14.9 percent on average in 2009 to 16.7 percent in 2010.
- More flexible wage policy.
- Inflation should remain low in 2010.
- Monetary easing and a rebound in credit demand expected.
- Fiscal deficit to stay in the vicinity of 3.5 percent.

Summary of projections

Croatian Economic Outlook Quarterly