May 29 (SeeNews) - Croatia's economic growth slowed down to a real 0.4% year-on-year in the first quarter of 2020, from 2.5% in the final three months of 2019, matching analyst expectations for 0.5% growth, Erste Bank Group said on Friday.
"Detailed structure revealed limited surprises, as domestic demand held up well amid positive performance on both private consumption and investments side, albeit showing strong deceleration on the consumption side (0.7% y/y), while investments activity kept solid pace (3.1% y/y)," Erste said in an instant comment, following the release of GDP data by Croatia's statistical office.
In addition, public consumption increased by 4.8% on the year, as expected, Erste added, noting that stronger pressure was visible on external demand, with exports declining 3% and imports falling 5.8%.
In the second quarter, however, both domestic and external demand will be taking a stronger hit by the coronavirus pandemic and the lockdown measures introduced to limit its spread, the analysts said.
"Consequently, double digit GDP contraction in 2Q20 looks like a certain thing. Going into 2H20, unsurprisingly tourism plays pivotal role and while remaining highly uncertain, outlook is looking a bit less grim than 4-6 weeks ago. In that sense, we remain in the optimistic camp, expecting now approx. 60% drop in the peak of the season," Erste noted.
It added it expects a full-year economic contraction of 9% in Croatia in 2020, with risks remaining predominantly он the downside.
The statistical office said earlier on Friday that in quarterly term, the GDP shrank 1.2% in January-March, after rising 0.4% in October-December.