Croatian National Bank governor Boris Vujcic said on Wednesday a recession was not expected in the next two years, only a relatively mild slowing of GDP growth, both in the euro area and Croatia.
He was responding to questions from the press in Opatija on the fringes of a conference on Croatia's 2020 economic policy.
Vujcic said that did not mean a recession was ruled out. As we know, economists are not very good in predicting recessions and so far there has not been much success in forecasting when one would happen, he added.
The current projection is that the euro area will likely grow a little under 1% in 2020 and that Croatia's GDP could grow about 2.5%, Vujcic said.
The main current risks are the trade war, primarily the one between the U.S. and China, he said. Possible sanctions have been announced, tariffs which the U.S. could impose on Europe, primarily the auto industry.
If that happens and trade tensions become even more strained, it will have a bad effect on growth and some countries in Europe could fall into a recession, but even in that case we expect only GDP growth to slow down, not a recession, Vujcic said.
"One can never definitely say there will be no recession, but we can definitely say that it will occur one day. When? That's a different matter, but we don't expect it in the next two years."