Croatian GDP (Gross Domestic Product) will drop 0.2 per cent in 2012 instead of growing 2.2 per cent as previously predicted, according to the Croatian National Bank's (HNB) latest analysis.

Significant changes in international trends and strong fiscal consolidation in public finances are the main reasons behind the big changes in HNB predictions for real GDP growth.

The expected stagnation will be mainly a consequence of lower growth of foreign demand and the announced fiscal consolidation.

HNB expects frugality to mark the government's future moves, with an emphasis on structural reforms for strengthening the domestic economy. The first positive results of such measures can be expected in 2013 thanks to a modest growth in exports of goods and services and stronger capital investments primarily in the private sector, business portal Poslovni Dnevnik writes.

The Croatian economy should return to growth in 2013 at a rate of 1.2 per cent, HNB projections show.