Zagreb - Croatian economy would shrink in 2009, though Prime Minister Ivo Sanader's cabinet still officially expects growth, local newspapers said Friday.

Quoting a forecast by the Zagreb-based Economic Institute, newspapers said the economy would decline by 1.4 per cent, instead of growing by 2 to 2.5 per cent, in line with the still-standing official projection.

The Vecernji List daily estimated that Sanader may be reluctant to acknowledge the economic downturn over concern that it would harm international Croatia's credit rating, currently of BBB-minus. (dpa)