Because of its fast recovery from the consequences of the Covid-19 crisis, Croatia will receive less funding from the EU's Recovery and Resilience Facility (RRF), based on updated rules for grants given to EU countries which the European Commission published on Thursday, state agency Hina said.

The European Commission released a table which said that funds earmarked for Croatia would total slightly more than €5.5 billion from the RRF, down from the previously projected €6.3 billion, or down by 13 percent. The RFF is a large EU-level stimulus program devised to help member countries deal with the impact of the Covid-19 pandemic and help jumpstart their economies in the wake of lockdowns and other disruptions.

The formula used to calculate 70 percent of the funding earmarked for each EU country takes into account population size, GDP per capita compared to the EU average, and the average unemployment rate in 2015-19 compared to the EU average. The remaining 30 percent is tied to the decline of GDP in real terms during the Covid-19 crisis in 2020, and economic activity in 2020-21.

The new revised calculation takes into account the difference between the projected GDP growth estimate from the Autumn Economic Forecast 2020 and the updated data based on real GDP in 2020-21. As a result, countries which have bounced back from the Covid-19 pandemic faster than originally expected will get slightly less funding, and those with a slower recovery slightly more.

According to provisional data for Croatia published by Eurostat, Croatia’s economy shrank by 8.1 percent in 2020, but rebounded by 10.2 percent in 2021, surpassing the pre-pandemic levels last year. The European Commission expected this would happen no sooner than 2022.

In the Autumn Economic Forecast released in November 2020, which served as the basis for the calculation of national allocations, the Commission estimated that the Croatian economy would shrink by 9.6 percent in 2020, before posting 5.7 percent growth in 2021 and 3.7 percent in 2022.