Croatia's trade deficit rose by 3% y/y to HRK24.8bn (€3.35bn) in January-May from HRK24bn a year ago, data from the statistics office showed on July 10.

Exports and imports rose robustly in 2015 and continued rising in 2016, but at a slower pace. In 2016, the foreign trade deficit rose by 4.7% y/y to HRK55.5bn while exports rose by 5.7% y/y to HRK92.8bn and by 5.4% y/y to HRK148.3bn. During 2017, Croatia’s foreign trade volume started to escalate again thanks to the better than expected GDP growth prospects.

Exports rose by 15% y/y to HRK41bn in January-May, while imports went up by 9% y/y to HRK64.8bn. Exports to the EU rose 9% y/y to HRK26.6bn, while imports from the EU rose 8% y/y to HRK51.3bn. Exports to non-EU markets rose by 27% y/y to HRK14.5bn, whereas imports from outside the EU rose by 20% y/y to HRK14.5bn.

The coverage of imports by exports stood at 62.4% in the first five months of 2017, higher than the 59.8% recorded a year earlier.

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.

However, growth decelerated to 2.5% y/y in Q1 from 3.4% in the last quarter of 2016. Export of goods grew 14.9% y/y in real terms in Q1, higher than 7.2% annual growth recorded in the previous quarter, thanks to the recovery in foreign demand.

The European Commission (EC) forecasts a 2.9% real GDP growth in Croatia for 2017 while it estimates exports to grow 5.2% y/y in real terms, lower than 6.7% in 2016, and imports to grow 6.6%, also lower than 7.3% in 2016.

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 EC said on May 11.

Croatia's Foreign Trade
HRK thousand	Jan-May/16	Jan-May/17	y/y
Exports	35,726,123	41,030,415	15%
Exports to the EU	24,341,758	26,564,982	9%
Exports to the non-EU markets	11,384,364	14,465,433	27%
Imports	59,728,072	64,805,788	9%
Imports from the EU	47,722,443	51,340,356	8%
Imports from the non-EU markets	12,005,629	14,465,432	20%
Balance	-24,001,950	-24,775,373	3%
Coverage of import by export (%)	59.8	62.4	-
source: dzs