August 28 (SeeNews) - Croatia's gross domestic product (GDP) grew by a real 2.4% year-on-year in the second quarter, coming below the 3.2% increase expected by analysts at Austria-based Erste banking group, Erste said on Wednesday.
Erste is, however, keeping its full-year GDP growth forecast for Croatia at 3.2%, Erste said in an instant comment after the country's statistical office published its first estimate for second-quarter GDP earlier on Wednesday.
"Following the upside surprise in 1Q19 (3.9% y/y and 1.5% q/q S.A.), 2Q19 brought a hard landing, as growth moderated to 2.4% y/y (0.2% q/q S.A.)," Erste said, adding that private consumption rose 2.7% year-on-year, somewhat below their expectations, while investments continued to grow solidly in the second quarter, by 8.2%, adding some 1.7 percentage points (pps) to the GDP formation.
Net exports, however, fell more than anticipated, and their contribution went into negative territory with some 2.8 pps, Erste analysts noted.
"With regard to the 2H19 outlook, we see domestic demand remaining in relatively good shape, with private consumption remaining backed by the labour market and solid credit and consumer sentiment," Erste added.
Key downside risks remain merchandise exports facing a gloomy outlook courtesy of global factors, Erste noted, considering trends by the end of 2019.
Croatia's GDP grew by a real 2.9% year-on-year in the second quarter of 2018.