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Croatia's GDP growth to slow down to 2.7% y/y in Q4 - think-tank

Author Iskra Pavlova
Croatia's GDP growth to slow down to 2.7% y/y in Q4 - think-tank Coincident Economic Index, CEIZ, of the Economic Institute in Zagreb (EIZ). Photo: EIZ

ZAGREB (Croatia), December 12 (SeeNews) - Croatia's economic growth is expected to slow down to 2.7% year-on-year in the fourth quarter of 2019, from 2.9% in the third quarter, a local think-tank said.

In seasonally-adjusted terms, the gross domestic product (GDP)  is estimated to have remained unchanged in October-December compared to July-September, the Economic Institute in Zagreb (EIZ) said on Wednesday in the monthly review of its Coincident Economic Index, CEIZ, for October.

EIZ will be able to calculate the fourth-quarter GDP growth with greater certainty once the CEIZ index values for November and December 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 October, the index was down by 0.1 index points compared to September, and increased by 0.7 index point compared to October 2018.

"When compared to October 2018, we owe a higher index value to an increase in tourist arrivals which rose by 11.7 percent and, to a lesser extent, to higher retail trade volume, which rose, in the observed period, by 3.1 percent," EIZ said.

It added that in seasonally-adjusted terms, both mentioned index components also rose compared to September 2019, but the other two index components - industrial production and VAT revenues, had a negative contribution, thus setting a short-term descending path for the index.

"CEIZ also recorded in October a slight increase in value compared to the last quarter of 2018 and a very mild decrease compared to the previous quarter, suggesting a stagnation of the economic activity at the very beginning of the fourth quarter," the report added.

In October, the central bank slightly lowered its 2019 forecast for Croatia's economic growth to 3.0% from the previously anticipated 3.1%, on expectations for stronger domestic consumption and weakening foreign demand.

The revision is in line with the latest estimates of the World Bank, the International Monetary Fund, the European Bank for Reconstruction and Development and the European Commission, which expect Croatia's economy to grow by 2.9% - 3.0% this year. They predict growth of 2.5% - 2.7%  in 2020.