© Reuters. FILE PHOTO: The European Central Bank (ECB) logo in Frankfurt, Germany, January 23, 2020. REUTERS/Ralph Orlowski
FRANKFURT (Reuters) – The European Central Bank gave Croatia’s plan to join the euro zone next year a positive assessment on Wednesday but said the country may struggle over the longer term to keep its inflation rate in line with its peers.
“Over the longer term there are concerns about the sustainability of inflation convergence in Croatia,” the ECB said in a biennial Convergence Report.
“Persistent labour shortages in some sectors may still result in stronger than expected wage growth, thus exerting upward pressure on inflation.”
The European Commission on Wednesday said that Croatia is ready to join the euro zone on Jan. 1, becoming the 20th member of the currency bloc.
ECB warns Croatia over long-term inflation convergence