ZAGREB, Nov 10 (Reuters) - Croatia's economy will next year expand around 4.0 percent, Deputy Prime Minister Damir Polancec said on Monday, giving a much more optimistic outlook than the central bank, which projected a 2 percent growth.
"We see growth next year at between 3.8 and 4.5 percent. Our projection is more optimistic than the central bank's which is, as governor (Zeljko) Rohatinski said, rather conservative," state radio quoted Polancec as saying at an economic forum.
Rohatinski said last week economic growth will next year considerably slow, to around 2 percent from an expected 3.3 percent growth this year. The government sees this year growth around 4.0 percent.
The economy expanded 5.6 percent in 2007, mostly driven by state investments, consumer spending and tourism industry.
Polancec said the state would press ahead with its major infrastructural projects -- mostly roads and energy -- despite the global financial crisis.
"Infrastructural projects are one of the main growth drivers and we will carry on with them," Polancec said and added the government would cut the budget gap next year to at least 0.8 percent of GDP from this year's target of 1.3 percent.
Alen Kovac, an analyst at Erste Bank, said the discrepancies in central bank and ministry forecasts were not surprising, given the uncertainty on global and regional markets.
"But one thing seems quite sure, the economy will have to suffer a slowdown," he said.
In a recent Reuters poll, most local analysts estimated next year's growth at around 3.5 percent but said there was a serious downward risk.
"There is no doubt that tourism and personal consumption will not remain such powerful growth drivers as they have been so far," Zdeslav Santic, an analyst of Raiffeisenbank, said. (Reporting by Igor Ilic; Editing by Ron Askew)