Croatia’s annual GDP growth estimated to slow to 3.1% in Q1

Croatia’s annual GDP growth estimated to slow to 3.1% in Q1
By Akin Nazli in Belgrade May 29, 2017

The Croatian economy is estimated to have grown by 3.1% y/y in the first quarter of 2017 thanks to consumption and exports growth, a poll of economists by Hina showed on May 28.

The Croatian statistics office will announce GDP data for Q1 on May 31, but Hina's poll pointed to an expected slowdown from 3.4% y/y in the last quarter of 2016.

GDP growth in Croatia accelerated to 2.9% y/y in 2016 from 1.6% in 2015 thanks to the private consumption growth, recovery in foreign demand and favourable tourism season. Croatia emerged from a six-year recession in 2015. The Adriatic country has posted GDP growth in the last nine quarters since Q4 2014. 2016 GDP growth was the highest since the 5.2% recorded in 2007, while Q4 growth was the highest since Q1 2008.

The European Commission (EC) cut its 2017 GDP growth forecast for Croatia to 2.9% in its Spring 2017 Economic Forecast from a previous 3.1%. The EC expects the troubles facing Croatia’s largest private company Agrokor to weigh on growth. However, the economic recovery is set to remain strong and broad-based.

The European Bank for Reconstruction and Development (EBRD) increased its 2017 GDP growth forecast for Croatia to 2.9% in the May edition of its Regional Economic Prospects report from 2% in the previous November report.

Croatian central bank (HNB) governor Boris Vujcic said earlier this month that the Agrokor crisis was expected to have only a moderate impact of 0.3-0.4pp on Croatian GDP in 2017, while the current political crisis would not have any significant result. 

The government’s GDP growth target for 2017 stands at 3.2% while the HNB forecasts 3% growth. However, the central bank will reassess its forecasts in the coming months, according to Vujcic.

The IMF hiked its 2017 GDP growth forecast for Croatia to 2.9% in the April edition of its World Economic Outlook (WEO) from a previous forecast of 2.1% in the October edition of the WEO

Real GDP Growth by Expenditure Approach
(y/y, %) Q3-15 Q4-15 2015 Q1-16 Q2-16 Q3-16 Q4
Overall 2.8 1.8 1.6 2.7 2.8 2.9 3.4
Final Consumption (FC) 1.2 1.9 1.1 2.4 2.9 3.0 3.1
- Households' FC 1.4 2.7 1.2 3.1 3.1 3.4 3.6
- Non-profit organizations' FC 2.0 1.8 1.9 2.5 1.9 2.5 1.8
-Government's FC 0.6 -0.3 0.6 0.4 2.5 2.1 1.8
Gross Fixed Capital Formation 2.2 3.4 1.6 4.3 6.5 2.9 4.6
Exports of goods and services 8.0 10.9 9.2 7.2 4.0 6.3 9.7
Imports of goods and services 8.1 13.9 8.6 6.1 7.3 6.0 9.7
Real GDP Growth by Production Aproach              
(y/y, %) Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4
Agriculture, forestry and fishing -3.0 -0.5 2.4 1.7 1.3 1.5 -3.7
Manufacturing, mining&quarrying and other industries 2.0 4.3 3.5 6.3 4.9 1.6 6.3
- Manufacturing 2.9 6.4 5.8 9.0 5.7 1.5 6.4
Construction -0.1 0.2 -1.5 2.9 4.1 1.0 2.3
Wholesale and retail trade, transportation, storage, accommodation and food service activities 4.4 5.2 2.9 4.8 3.2 5.1 5.4
Information and Communication 0.0 -0.1 0.4 1.0 1.9 3.6 4.2
Financial and Insurance Activities 0.9 -0.3 0.7 0.7 1.2 1.8 -0.5
Real Estate Activities -0.1 0.1 0.1 0.4 0.7 0.7 0.3
source: dzs              

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