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Croatia's GDP growth to pick up to 3.2% y/y in Q3 - think-tank

Author Iskra Pavlova
Croatia's GDP growth to pick up to 3.2% y/y in Q3 - think-tank GDP, Creative Commons.

ZAGREB (Croatia), September 16 (SeeNews) - Croatia's economic growth is expected to accelerate to 3.2% year-on-year in the third quarter of 2019, from 2.4% in the second quarter, the Economic Institute in Zagreb (EIZ), a think-tank, said on Monday.

In seasonally-adjusted terms, the estimated rise in the gross domestic product (GDP) in July-September is 0.8% compared to April-June, EIZ said in the monthly review of its Coincident Economic Index, CEIZ, for July.

Yet, EIZ will be able to calculate the third-quarter GDP growth with greater certainty once the CEIZ index values for August and September become available.

The CEIZ index aims to provide timely information on the current business cycle conditions. Its value changes simultaneously with the business cycle, thus serving as an indicator of the present state of the economy. 

In July, the index was up by 0.3 index points compared to June, and increased by 0.6 index point compared to July 2018.

"CEIZ index value in July was 0.2 index points higher than the average index value in the second quarter of 2019, suggesting a mild acceleration of economic activity in the country compared to the previous quarter," EIZ said.

It added that in seasonally-adjusted terms, three out of four index components rose in the third quarter compared to the second quarter (based on July data), including VAT revenues to the state budget, industrial, and real growth in retail trade. The number of tourist arrivals, on the other hand, recorded a decline.

Earlier this month, Croatia's central bank also said that based on an analysis of all available indicators, it expects the country's economic growth to accelerate in the third quarter after slowing down on both annual and quarterly comparison basis in the second quarter.

Croatia's GDP growth slowed to a real 2.4% on the year in the second quarter of 2019, from 3.9% in the preceding quarter, according to earlier released data of the country's statistical office.

The central bank raised in July its 2019 economic growth forecast to 3.1% from 2.5%-2.7% expected previously, saying the investment growth of both public and private sectors is expected to continue, to be coupled with higher domestic consumption.

In August, the government in Zagreb reaffirmed its projections for 2.8% GDP growth this year, which would slow down to 2.5% in 2020 and 2.4% in each of 2021 and 2022.